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Justices reject NLRB recess appointments and mark constraints on presidential power

President Obama lacked the authority to make recess appointments to the National Labor Relations Board in January 2012

This article originally appeared on June 27 on Bloomberg BNA.

 

President Obama lacked the authority to make recess appointments to the National Labor Relations Board (NLRB) in January 2012 because he acted when the Senate was holding pro forma sessions and wasn't in a “recess,” the U.S. Supreme Court ruled June 26.

While the court clarified some ground rules for future recess appointments, labor lawyers quickly observed that the impact of the decision on the NLRB and its stakeholders—including employers, unions, and employees—remains to be seen. The agency may have to reconsider hundreds of decisions, including some of the most important and controversial rulings the board made in 2012 and 2013.

In a unanimous judgment, the high court affirmed a ruling of the U.S. Court of Appeals for the District of Columbia Circuit that an NLRB order against a Yakima, Wash., bottling firm was invalid. The board lacked a quorum because three of its five members were improperly appointed by Obama, the Supreme Court said, agreeing with the appeals court.

However, the high court divided 5-4 on important questions about the power of Obama and future presidents to make recess appointments to positions that normally require the advice and consent of the Senate.

Writing for the majority, Justice Stephen G. Breyer said the president may make appointments without Senate confirmation during recesses that occur either during or outside of Senate sessions, and is not limited to filling vacancies that come into being during a recess. But the president cannot act during Senate recesses of less than three days, and “presumptively” cannot make a recess appointment during a recess of less than 10 days, the court said.

Justices Anthony M. Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan joined in the majority opinion.

Justice Antonin Scalia, joined by Chief Justice John G. Roberts, and Justices Clarence Thomas and Samuel A. Alito, concurred in the judgment, but wrote separately and disagreed with much of the majority's reasoning.

Scalia agreed the 2012 NLRB appointments were improperly made because the Senate was actually in session, but he also argued that the U.S. Constitution only gives the president the power to act without Senate confirmation during recesses that occur between sessions of the Senate, not during intrasession recesses.

The concurring opinion also agreed with the D.C. Circuit that the recess appointment power only applies to vacancies that arise during a Senate recess, and does not allow the White House to act during a recess on a vacancy that existed before the recess even began.

Reactions Split on Ruling

Miguel A. Estrada of Gibson, Dunn & Crutcher LLP in Washington argued the case for Senate Minority Leader Mitch McConnell (R-Ky.) and other Republican senators. The “Supreme Court reaffirmed the Senate's power to prescribe its own rules, including the right to determine when it is in session, and rejected the President's completely unprecedented assertion of unilateral appointment power,” he told Bloomberg BNA in an e-mail.

But Senate Majority Leader Harry Reid (D-Nev.) issued a statement saying the president acted properly in 2012, arguing the NLRB had “ceased to function” until Obama “did the right thing when he made these appointments.” Reid said the high court's ruling “will have no effect on our ability to continue ensuring that qualified nominees receive an up-or-down vote.”

NLRB Chairman Mark Gaston Pearce said in a statement the board is “analyzing the impact that the Court's decision has on Board cases in which the January 2012 recess appointees participated.”

Pearce noted that the board now has “a full contingent of five Senate-confirmed members who are prepared to fulfill our responsibility to enforce the National Labor Relations Act.” The NLRB chairman said the board intends to resolve any cases affected by the Noel Canning decision “as expeditiously as possible.”

Vacancies Had Left Board Without Quorum

Obama made the appointments to fill vacancies on the board that would have left the NLRB without a quorum to decide cases.

Democrat Craig Becker was given a recess appointment as a board member in 2010 after his nomination by the president failed to move forward in the Senate on a cloture vote. Becker's recess appointment was set to expire Jan. 3, 2012, at the formal end of the first session of the 112th Congress.

The Supreme Court held in New Process Steel LP v. NLRB, 130 S. Ct. 2635, 188 LRRM 2833 (2010), that the authority of the five-seat board cannot be exercised by a panel with fewer than three members.

There were already two vacant seats on the board, so Becker's departure on Jan. 3 left the board with only two members who lacked authority to decide cases under New Process Steel.

On Jan. 4, 2012, Obama announced recess appointments of Democrats Sharon Block and Richard F. Griffin and Republican Terence F. Flynn to serve on the board. Obama had nominated Flynn in January 2011, and nominated Block and Griffin on Dec. 15, 2011, but the Senate had not acted on any of the nominations.

The Senate had been holding pro forma sessions every three days for weeks before the president's action, and Republicans contended that the Senate was not in recess when the appointments were made.

Noel Canning filed a petition for D.C. Circuit review of a February 2012 unfair labor practice decision that the company violated Section 8(a)(5) of the NLRA when it refused to sign a collective bargaining agreement containing terms it had negotiated with International Brotherhood of Teamsters Local 760 (358 N.L.R.B. No. 4, 192 LRRM 1503 (2012)).

D.C. Circuit Found Appointments Invalid

A three-judge panel of the D.C. Circuit found that the NLRB order against the company would otherwise have been enforceable, but the president's recess appointments were unconstitutional (705 F.3d 490, 194 LRRM 3089 (D.C. Cir. 2013). The board's order against Noel Canning was therefore invalid because it was not approved by a quorum of at least three board members, the court held.

The NLRB did not ask for rehearing in the D.C. Circuit but opted to file a petition in the Supreme Court. The government asked the court to review the appeals court's reasoning on recesses and on the occurrence of a vacancy.

Noel Canning asked the court to consider and resolve a third issue—whether the president's recess appointment power may be exercised when the Senate is convening every three days in pro forma sessions as it was in early 2012. The court agreed to consider the additional issue.

The high court heard oral argument in the case in January.

Majority Rejects Narrowest View of President's Power

Discussing “background considerations,” Breyer said the president's recess appointment power under the recess appointments clause of the Constitution is “a subsidiary, not a primary, method for appointing officers of the United States.” The court's task, Breyer said, was “to interpret the Clause as granting the President the power to make appointments during a recess but not offering the President the authority routinely to avoid the need for Senate confirmation.”

Calling the historical practice concerning executive appointments a matter of “significant weight,” Breyer said historical examples convinced the majority that the presidential power to make appointments without Senate confirmation during a recess includes both recesses that occur between Senate sessions and those of “substantial length” that occur during a session of the Senate.

The majority acknowledged the Constitution refers to appointments during “the Recess” and the phrase might be read as pinpointing an interval between Senate sessions. But Breyer wrote that the language should receive a broader interpretation to avoid “mak[ing] the President's recess-appointment power dependent on a formalistic distinction of Senate procedure.”

Court Cites Three-Day and 10-Day Parameters

“The greater interpretive problem,” the majority said, “is determining how long a recess must be in order to fall within the Clause. Is a break of a week, or a day, or an hour too short to count as a ‘recess'? The Clause itself does not say.”

The solicitor general argued the minimum interval for recess appointments should be three days, citing Article I, Section 5, clause 4 of the Constitution, which states: “Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days.”

Breyer said the court agreed that three days would be too short, but went on to say that the Constitution would not simply permit the president to act during any recess that was more than three days.

“[I]n light of historical practice,” the majority said, “a recess of more than 3 days but less than 10 days is presumptively too short to fall within the Clause.”

“We add the word ‘presumptively' to leave open the possibility that some very unusual circumstance—a national catastrophe, for instance, that renders the Senate unavailable but calls for an urgent response—could demand the exercise of the recess-appointment power during a shorter break,” Breyer said.

“In sum,” the majority said, “we conclude that the phrase ‘the recess' applies to both intra-session and inter-session recesses. If a Senate recess is so short that it does not require the consent of the House, it is too short to trigger the Recess Appointments Clause … [a]nd a recess lasting less than 10 days is presumptively too short as well.”

The majority also found that the president's constitutional power to fill vacancies extends to positions that exist during a recess, not just those that first come into existence during a recess.

The court concluded that while the language of the Constitution is not entirely clear, “the basic purpose” of granting the president a recall appointment power, and historical practice of making such appointments satisfied the court that the president may act on vacancies that come into existence while the Senate is in session as well as those that first occur during a recess.

Senate Was in Session When President Acted

Addressing the Senate's situation in January 2012 when Obama made the disputed appointments, Breyer said the court had to determine whether the legislative body's pro forma sessions at three-day intervals were actually part of an extended recess, as the solicitor general argued for the NLRB, or whether they were part of a Senate session during which the president's recess appointment power was unavailable.

“In our view,” the court said, “the pro forma sessions count as sessions, not as periods of recess. We hold that, for purposes of the Recess Appointments Clause, the Senate is in session when it says it is, provided that, under its own rules, it retains the capacity to transact Senate business. The Senate met that standard here.”

Breyer wrote that the court was not required to give absolute deference to the view of the Senate, but the Senate's view was entitled to great deference and the body clearly considered that it was in session when it was conducting pro forma sessions.

Breyer said the court was not prepared to assess whether the Senate's activity or inactivity in late 2011 and January 2012 was the functional equivalent of a recess.

“From a practical perspective,” Breyer wrote, “judges cannot easily determine such matters as who is, and who is not, in fact present on the floor during a particular Senate session.” He added that “[j]udicial efforts to engage in these kinds of inquiries would risk undue judicial interference with the functioning of the Legislative Branch.”

Concluding that the president exceeded his constitutional authority by making recess appointments during a period when the Senate was in session, not in recess, Breyer dismissed the government's argument that the court's holding could significantly alter the constitutional balance of power between the legislative and executive branches.

“Most appointments are not controversial and do not produce friction between the branches,” Breyer wrote. “Where political controversy is serious, the Senate unquestionably has other methods of preventing recess appointments. As the Solicitor General concedes, the Senate could preclude the President from making recess appointments by holding a series of twice-a-week ordinary (not pro forma) sessions,” he observed.

“Regardless,” Breyer wrote, “the Recess Appointments Clause is not designed to overcome serious institutional friction. It simply provides a subsidiary method for appointing officials when the Senate is away during a recess. Here, as in other contexts, friction between the branches is an inevitable consequence of our constitutional structure.”

Scalia Blasts ‘Judge-Made Rules.'

In a concurring opinion that was longer than the majority's, Scalia agreed the Block, Flynn, and Griffin recess appointments to NLRB seats were unconstitutional, “but for the far narrower reason that they were made during a 3-day break in the Senate's session.”

“On its way to that result,” Scalia complained, “the majority sweeps away the key textual limitations on the recess-appointment power.”

“The Court's decision transforms the recess-appointment power from a tool carefully designed to fill a narrow and specific need into a weapon to be wielded by future Presidents against future Senates,” he said.

Scalia wrote that he would rule the president has the constitutional power to make recess appointments only during a gap between Senate sessions. Departing from that view, he argued, required the majority to engage in “judicial fabrication of vague, unadministrable limits on the recess-appointment power (thus defined) that overstep the judicial role.”

Rejecting Breyer's claim that the court's decision was supported by historical practice, Scalia said “no practice worthy of our deference supports the majority's conclusion on this issue.”

In the concurring opinion, Scalia also said he would hold that the recess appointment power is limited to vacancies that arise during the recess in which they are filled, making the NLRB appointments invalid for that reason as well.

“The Court's contrary conclusion is inconsistent with the Constitution's text and structure, and it further undermines the balance the Framers struck between Presidential and Senatorial power,” Scalia argued.

“What the majority needs to sustain its judgment is an ambiguous text and a clear historical practice” under the Constitution, Scalia wrote. “What it has,” he argued, “is a clear text and an at-best-ambiguous historical practice.”

“The majority replaces the Constitution's text with a new set of judge-made rules to govern recess appointments,” Scalia said. “How this new regime will work in practice remains to be seen,” he wrote, but “the limitation upon the President's appointment power is there not for the benefit of the Senate, but for the protection of the people; it should not be dependent on Senate action for its existence.”

NLRB Fallout Will Be Significant

Attorneys were still reviewing the decision and its precise impact on the NLRB June 26, but there was no doubt the impact will be significant.

Charles I. Cohen, senior counsel in Morgan Lewis & Bockius's labor and employment practice in Washington, served as a Senate-confirmed member of the NLRB from March 1994 to August 1996.

He told Bloomberg BNA that about 300 published NLRB decisions, as well as approximately 500 unpublished decisions, that were decided by the board between January 2012 and August 2013 depended on the votes of recess appointees to have a quorum.

There are, Cohen noted, more than 100 cases pending in federal appellate courts, where the quorum issue was raised.

Litigants in some of those cases may no longer have an interest in having them considered by the newly constituted five-member NLRB, but many will want to revisit the cases, and the board will allow them to do so, Cohen said.

The NLRB weathered a wave of cases returning to the board after the Supreme Court held in New Process Steel that the agency could not decide cases with fewer than three members on a panel, but Cohen said the situation after the Noel Canning decision is more serious.

Cohen said the “universe” of cases that could return to the board is much larger this time, and the cases have different characteristics. Before New Process, when the board had only Chairman Wilma B. Liebman and Member Peter C. Schaumber, the two members issued decisions only in cases where they could agree on appropriate action, and they effectively tabled other cases in which difficult or novel issues precluded agreement.

However, Cohen observed, the board that decided cases from January 2012 to mid-2013 “was not shy” about addressing important and sometimes controversial cases. Some of the parties who litigated those cases are more likely to be interested in taking their cases back to the board in hopes of obtaining different outcomes, he said.

Heavy Interest in Case Reconsideration Predicted

Scott J. Witlin, a partner in Barnes & Thornburg who heads the labor and employment practice in the firm's Los Angeles office, told Bloomberg BNA that any party who lost a case at the board during the period when the 2012 recess appointees served may want a chance to have a case reconsidered.

Witlin said the NLRB was seen as “heavily partisan” during that period, particularly when the resignation of Republican member Flynn left the board for a time with a 3-1 Democratic majority.

The lawyer observed that while the board issued some significant and controversial decisions in 2012 and 2013, returning the same cases to a board that now has a 3-2 Democratic majority makes “major policy shifts unlikely.” Nevertheless, he said, many parties in NLRB cases may conclude that a future change in board composition, or developments in the courts, will make another effort before the NLRB worthwhile.

Republican Brian E. Hayes was confirmed by the Senate as a NLRB member in June 2010 and served until August 2012. Hayes, who now represents employers as a shareholder at Ogletree, Deakins, Nash, Smoak & Steward P.C. in Washington, told Bloomberg BNA that the NLRB will have to deal with remands of more than 100 cases now pending in federal courts that involve the recess appointments held invalid by the Supreme Court.

But the board will likely have to reconsider many more cases, he predicted. Even if a party that lost an NLRB decision affected by the recess appointment issue did not raise the issue before the board, Hayes said, “the decisions in question were made by a constitutionally invalid entity.”

“I do not believe a respondent must raise or waive a claim based on the constitutional infirmity of the decisional forum in order to preserve the claim,” Hayes said. “In my view, such a claim can be raised at any point.”

Congressional Leaders React

Republican leader McConnell issued a statement after the decision that the Obama administration “has a tendency to abide by laws that it likes and to disregard those it doesn't.”

In the January 2012 appointments, McConnell said, “[t]he President made an unprecedented power grab by placing political allies at a powerful federal agency while the Senate was meeting regularly and without even bothering to wait for its advice and consent.”

McConnell, who filed an amicus brief in the Supreme Court along with 44 other Republican senators, said: “I was proud to lead the effort to defend the Senate against the President's unprecedented power grab.”

But Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor, and Pensions Committee, said Senate Republicans had been “determined to reduce the NLRB to a toothless body” until Obama acted.

Stating “I believe President Obama did the right thing in using recess authority to appoint members” to the NLRB, Harkin said going forward “our focus should be on taking necessary steps to ensure that we have a strong NLRB able to adjudicate our nation's labor laws and to ensure that our workers are able to participate in a democratic workplace.”

House Speaker John Boehner (R-Ohio), who filed an amicus brief supporting Noel Canning before the Supreme Court, had a different view. In a statement, Boehner said the president's recess appointments “were made to an agency notorious for putting the interests of Big Labor ahead of America's workers.” The court's ruling, Boehner said, was “good news for our economy.”

Trumka Defends Obama's Actions

AFL-CIO President Richard L. Trumka issued a statement defending Obama's use of the recess appointments to avoid having the NLRB cease operating due to lacking a quorum.

“Fortunately,” Trumka observed, “Senate leaders successfully changed Senate rules so that Executive Branch nominees can now be confirmed by a majority of the Senate and cannot be blocked by a minority of senators.”

Stating “the impact of today's ruling is far less than it might have been,” Trumka said: “We are confident the NLRB will handle the pending cases impacted by Noel Canning efficiently and expeditiously.”

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