Court rules Obama's NLRB appointments unconstitutional

WASHINGTON D.C. (Legal Newsline) - In a major blow to President Obama, the United States Court of Appeals for the District of Columbia ruled Friday that the President's "intrasession appointment" of three new members to the National Labor Relations Board was an unconstitutional abuse of power.

White House press secretary Jay Carney called the ruling "novel and unprecedented," claiming the ruling contradicts 150 years of practice by presidents of both parties.

The Court, however, was unequivocal in its ruling and did not appear to struggle in making the decision.

Noel Francisco, a lawyer at Jones Day who argued the case for Noel Canning, said the court had returned to the Constitution's intent, which was to make the recess appointment an emergency power for use only when Congress was not available.

"Issues like this -- it's not about protecting the Congress from the president and the president from Congress. The Constitution draws these lines ultimately to limit the government to protect the people," Francisco said.

Forbes magazine termed the decision an "embarrassing blow" to the President and Senate Minority Leader Mitch McConnell pointed out that the ruling casts "serious doubt" on the constitutionality of Obama's appointment of Richard Cordray to head a new consumer watchdog. The Cordray appointment was made under similar circumstances.

The Washington Post reports, "If the ruling stands, it would mean two big things for the five-member NLRB.

"First, the labor board would have just one appointed member left, which would force it to shut down. (At least three sitting members are needed for a quorum.)

"Second and just as significantly, hundreds of NLRB decisions handed down since January 2012 would become invalid. That includes rulings on everything from union dues checkoffs to rules on social media."

The three-judge panel consisting of Chief Judge David B. Sentelle and Judges Karen LeCraft Henderson and Thomas B. Griffith voted unanimously to invalidate the appointments.

Sentelle wrote the opinion for the Court.

The case arose out of a dispute between Noel Canning, a Washington state Pepsi-Cola bottler and distributor, and Teamsters Local 760. The dispute concerned the negotiation of a collective bargaining agreement.

After coming to an impasse, the NLRB made a ruling which Noel Canning considered unfavorable to it. Noel Canning property filed an appeal to the D.C. Circuit on both statutory and constitutional grounds.

"At its inception," Sentelle wrote, "this appears to be a routine review of a decision of the National Labor Relations Board over which we have jurisdiction under 29 U.S.C. § 160(e) and (f), providing that petitions for review of Board orders may be filed in this court.

"While the posture of the petition is routine, as it developed, our review is not. In its brief before us, Noel Canning questions the authority of the Board to issue the order on two constitutional grounds.

"First, petitioner asserts that the Board lacked authority to act for want of a quorum, as three members of the five-member Board were never validly appointed because they took office under putative recess appointments which were made when the Senate was not in recess.

"Second, it asserts that the vacancies these three members purportedly filled did not "happen during the Recess of the Senate," as required for recess appointments by the Constitution.

"Because the Board must have a quorum in order to lawfully take action, if petitioner is correct in either of these assertions, then the order under review is void ab initio.

Noel Canning, however, had also raised two statutory claims which had to be dealt with first.

"It is a well-settled principle of constitutional adjudication that courts will not pass upon a constitutional question although properly presented by the record, if there is also present some other ground upon which the case may be disposed of," Sentelle wrote.

The Court then analyzed the two statutory claims, finding them to have no merit.

"Having determined that Noel Canning does not prevail on its statutory challenges, consideration of the constitutional question is unavoidable, and we proceed to its resolution.

A NLRB administrative law judge had ruled that Noel Canning had violated the National Labor Relations Act. Noel Canning filed exceptions to the ALJ's findings and a three-member panel of the board consisting of members Hayes, Flynn, and Block confirmed the ALJ's findings.

On the date of the decision, Feb. 8, 2012, the Board "purportedly" had five members. Two of the members, Chairman Mark G. Pearce and Brian Hayes, had been confirmed by the Senate on June 22, 2010.

The other three members, Sharon Block, Terence, F. Flynn, and Richard F. Griffin, were all appointed by President Obama on Jan. 4, 2012, without congressional approval. The administration claimed the appointments fell under the Recess Appointments Clause of the Constitution.

"At the time of the President's purported recess appointments of the three Board members, the Senate was operating pursuant to a unanimous consent agreement, which provided that the Senate would meet in pro forma sessions every three business days from December 20, 2011, through January 23, 2012," the opinion states.

This type of agreement has been used under both Democratic and Republican control over the years.

"The agreement stated that 'no business [would be] conducted' during those sessions. During the December 23 pro forma session, the Senate overrode its prior agreement by unanimous consent and passed a temporary extension to the payroll tax."

During the Jan. 3 pro forma session, the Senate acted to convene the second session of the 112th Congress and to fulfill its constitutional duty to meet on Jan. 3 as specifically mandated by the Constitution:

"The congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day." U.S. Const. amend. XX § 2.

"Noel Canning asserts that the Board did not have a quorum for the conduct of business on the operative date, February 8, 2012. Citing New Process Steel, L.P. v. NLRB, which holds that the Board cannot act without a quorum of three members, Noel Canning asserts that the Board lacked a quorum on that date."

"Noel Canning argues that the purported appointments of the last three members of the Board were invalid under the Recess Appointments Clause of the Constitution, Article II, Section 2, Clause 3.

"Because we agree that the appointments were constitutionally invalid and the Board therefore lacked a quorum, we grant the petition for review and vacate the Board's order," Sentelle wrote.

"It is undisputed that the Board must have a quorum of three in order to take action. It is further undisputed that a quorum of three did not exist on the date of the order under review unless the three disputed members (or at least one of them) were validly appointed.

"It is further agreed that the members of the Board are 'Officers of the United States' within the meaning of the Appointments Clause of the Constitution, which provides that the President 'shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law.'

"Finally, it is undisputed that the purported appointments of the three members were not made by and with the Advice and Consent of the Senate," Sentelle wrote.

The Board contended that the President had made the appointments under a provision referred to as the "Recess Appointments Clause" which provides that the President may fill vacancies during a recess of the Senate.

Noel Canning argued that the Recess Appointments Clause was inapplicable because the Senate was not in recess.

The Court examined the history and precedent regarding recess appointments at length before drawing its conclusion.

"As Chief Justice Marshall made clear in Marbury v. Madison, "[i]t is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases, must of necessity expound and interpret that rule.

"If two laws conflict with each other, the courts must decide on the operation of each. In Marbury, the Supreme Court established that if the legislative branch has acted in contravention of the Constitution, it is the courts that make that determination.

"In Youngstown Sheet & Tube Co. v. Sawyer, the Supreme Court made clear that the courts must make the same determination if the executive has acted contrary to the Constitution. That is the case here, and we must strike down the unconstitutional act.

"In short, we hold that "the Recess" is limited to intersession recesses. The Board conceded at oral argument that the appointments at issue were not made during the intersession recess: the President made his three appointments to the Board on January 4, 2012, after Congress began a new session on January 3 and while that new session continued.

"Considering the text, history, and structure of the Constitution, these appointments were invalid from their inception. Because the Board lacked a quorum of three members when it issued its decision in this case on February 8, 2012, its decision must be vacated."

Although the Court's finding on the invalidity of the intersession appointments is enough to nullify any of the acts of the LRB since the unconstitutional appointments, the Court went ahead and looked at the argument put forth by the Board regarding the meaning of the word "happen" in the Recess Appointments Clause.

"The company contends that "happen" means "arise" or "begin" or "come into being." The Board, on the other hand, contends that the President may fill up any vacancies that "happen to exist" during "the Recess."

"It is our firm conviction that the appointments did not occur during 'the Recess.' We proceed now to determine whether the appointments are also invalid as the vacancies did not 'happen' during 'the Recess'," wrote Sentelle.

"The power of a written constitution lies in its words. It is those words that were adopted by the people. When those words speak clearly, it is not up to us to depart from their meaning in favor of our own concept of efficiency, convenience, or facilitation of the functions of government.

"In light of the extensive evidence that the original public meaning of "happen" was "arise," we hold that the President may only make recess appointments to fill vacancies that arise during the recess.

"As with the first issue, we hold that the petitioner's understanding of the constitutional provision is correct, and the Board's is wrong. The Board had no quorum, and its order is void.

"For the reasons set forth above, we grant the petition of Noel Canning and vacate the Board's order. We deny the cross-petition of the Board for enforcement of its invalid order."

NLRB Chairman Mark Gaston Pearce said the board is disappointed by the ruling.

"The Board respectfully disagrees with today's decision and believes that the President's position in the matter will ultimately be upheld," Pearce said. "It should be noted that this order applies to only one specific case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other courts of appeals.

"In the meantime, the board has important work to do. The parties who come to us seek and expect careful consideration and resolution of their cases, and for that reason, we will continue to perform our statutory duties and issue decisions."

The Heartland Institute, which calls itself a free-market think tank, issued a statement Friday about the ruling.

"The court decision today invalidates President Obama's appointment of three members to the National Labor Relations Board on January 4, 2012,: the Heartland statement said. "This means the Board lacked a quorum and all of its decisions in the past year are invalid. There are hundreds of them.

"The decision will likely be appealed, but in the meantime this court decision is a victory for the rule of law. Words in the Constitution have meaning, the court held. Recess means recess, and vacations don't count."