Updated January 25, 2013, 2:33 p.m. ET
By MELANIE TROTTMAN
- A federal appeals court on Friday ruled that President Barack Obama violated the Constitution when he bypassed the Senate to fill vacancies on the National Labor Relations Board.
A federal appeals court ruled that President Obama violated the Constitution when he bypassed the Senate to fill vacancies on a labor panel. Aaron Zitner reports on Lunch Break. Photo: AP.
The three-judge panel said that as a result, the labor-relations board has lacked the quorum it needs to conduct much of its business.
The court's decision could also have implications for Richard Cordray, the head of the Consumer Financial Protection Bureau. Mr. Obama also used a recess appointment to name him to his position after Republicans blocked his nomination from coming to a vote.
Obama Makes Recess Appointments to NLRB (1/4/2012)
Law Blog: Recess Appointments, Technically Without the Recess (1/4/2012)
Republican Leaves Labor Board (7/25/12)
The challenge to the appointments was made in a lawsuit filed against the NLRB by soda bottler and distributor Noel Canning. The company claimed that, among other things, a board ruling against it in a union dispute last year was moot because Mr. Obama didn't seek Senate approval for three members he appointed to the board during recess. The company contended that those members were invalid, so the board, which has five slots, lacked the necessary quorum needed to issue the ruling.
The court ruled Friday that, because it agreed that the appointments were constitutionally invalid and the board therefore lacked a quorum, it also vacated the board's order against Noel Canning.
On Jan. 4, 2012, Mr. Obama appointed Democratic union lawyer Richard Griffin, Democratic Labor Department official Sharon Block and Republican NLRB lawyer Terence Flynn. Mr. Flynn stepped down from the board later in the year.
The Justice Department argued on behalf of the NLRB in the Noel Canning case when the three-judge panel heard the arguments at the U.S. Court of Appeals for the District of Columbia Circuit last month.
It wasn't immediately clear if the Obama administration plans to appeal the panel's ruling. The Justice Department said it was studying the ruling but had no immediate comment.
If the administration does appeal, it would have two options: It could go directly to the Supreme Court or ask the entire D.C. Circuit Court to rehear the case that so far has only been heard by the court's three-judge panel. Neither body would be obligated to hear the case but typically, the Supreme Court agrees to hear cases when the administration seeks a review.
Though the ruling technically applies only to the Noel Canning case, it calls into question all the other case decisions the labor board has made since the recess appointees were installed. It isn't yet clear if those decisions would remain in force while any potential appeal winds its way through court. The NLRB didn't have an immediate comment on the decision.
Obama speaks during a news conference at the White House on Jan. 14.
The ruling raises similar questions about decisions made by the Consumer Financial Protection Bureau over the past year since Mr. Cordray took the helm after Mr. Obama installed him through a recess appointment. Republicans on Capitol Hill and banking groups have challenged the consumer agency since its creation as part of a broader overhaul of rules governing banking and other financial institutions.
There's precedent on the NLRB's need to have at least three members to conduct most of its business. The Supreme Court in 2010 made clear that the five-seat labor board requires a quorum of at least three members to issue case rulings. The Supreme Court made that decision in a lawsuit challenging a ruling made when the board operated with just two members for more than two years. Without a quorum of three, the NLRB can't issue case rulings or undertake rule-making and can do little more than oversee union elections.
Mr. Obama's decision to make the recess appointments to the NLRB and the Consumer Financial Protection Bureau set off a clash with Republicans over the scope of presidential power. Republicans criticized the move as a power grab and dismissal of the Senate, while the Obama administration said it was operating within its authority.—Jess Bravin and Michael Crittenden contributed to this article.