Obama Recess Appointments Violate Constitution; Another Appeals Court Rules Against the NLRB

Another federal appeals court has ruled that President Obama’s so-called “recess appointments” to the National Labor Relations Board were unconstitutional because the Senate was not in recess at the time: “We hold that the Recess of the Senate in the Recess Appointments Clause refers to only intersession breaks.” So ruled the majority of a three-judge panel of the Third Circuit Court of Appeals, in its 2-to-1 ruling in NLRB v. New Vista Nursing and Rehabilitation. Generally, our Constitution’s system of checks and balances requires Senate approval of Presidential appointees, but this requirement, found in Article II’s Appointments Clause, contains an exception for temporary recess appointments made during “the recess” of the Senate.

The appeals court noted that other courts such as the Eleventh Circuit have permitted recess appointments not just in “intersession breaks” but also “breaks within a session (i.e., intrasession breaks) that last for a non-negligible time.” But President Obama’s “recess” appointments would not be valid even under that broader reading of his powers (as I previously explained).

Obama’s appointments of the NLRB members would be valid only under a still broader, radically expansive interpretation of the Recess Appointments Clause that would gut the Senate’s power to review Presidential appointments. The NLRB and the Obama administration argue that recess appointments can be made whenever “the Senate is not open to conduct business” — presumably including when the Senate goes home for the evening or even takes a lunch break — and even includes “periods in which the Senate holds pro forma sessions” but is not available to vote on nominations. This argument is of “recent vintage,” noted the appeals court, and is plainly contrary to the Recess Appointments Clause’s “meanings at the time of ratification” of the Constitution.

(The court’s opinion, issued on May 16, is quite lengthy: the majority opinion totals 102 pages, while the dissent runs 55 pages.)

In an earlier ruling in Noel Canning v. NLRB, the D.C. Circuit Court of Appeals reached the same conclusion as the Third Circuit, finding that there was simply no “recess” in existence to authorize the President to make these so-called recess appointments. In its January 25 decision, the D.C. Circuit also noted that Obama’s appointments were invalid for an additional reason: the Recess Appointments Clause only authorizes appointments to fill vacancies that “happen” during a recess, and even the Obama administration admits that the vacancies occurred before, rather than during, any recess.The Obama administration has recently filed a petition with the Supreme Court asking it to review and reverse the D.C. Circuit’s decision. Its petition contradicts prior administration claims by admitting that the D.C. Circuit’s ruling will, if allowed to stand, also invalidate other Obama administration “recess” appointments, such as the appointment of Richard Cordray to head the powerful Consumer Financial Protection Bureau (CFPB). Cordray’s appointment was as invalid as the NLRB appointments, since he was “recess” appointed by Obama during the same non-existent recess.

Earlier, the Obama administration had thumbed its nose at the D.C. Circuit, saying it would not fix the constitutional violation identified by the court, but rather would simply continue to defend 200 other NLRB decisions issued by the three invalidly appointed NLRB members as if those decisions were valid. It also had indicated that it would disregard the ruling’s binding ramifications for Cordray’s recess appointment, even though he was appointed on the very same day. Cordray’s “recess” appointment to the CFPB during a non-existent “recess” is one of several constitutional violations challenged in State National Bank of Big Spring v. Geithner, another lawsuit pending in Washington, D.C. That case, in which CEI is involved, also challenges provisions of the law that created the CFPB, the 2010 Dodd-Frank Act.

Just as the NLRB’s actions were ruled invalid by the courts (since they were taken by invalidly-appointed members), Cordray’s actions as CFPB director are likewise invalid. Just as the NLRB’s order was vacated in the Noel Canning case, so, too, should the CFPB’s actions be vacated by the courts (even assuming the CFPB itself is constitutional, despite its unusual lack of accountability). Lawyers who advise clients on finance and banking cases have noted that obvious fact, observing that “If the Cordray appointment is void, then so too is every supervisory action and every new regulation promulgated by the CFPB arising out of newly created bureau powers.”

But White House spokesman Jay Carney argued that the decision’s implications for the CFPB (and for other decisions by the NLRB) could just be ignored. “Carney said the ruling affects only one case and ‘has no bearing on’ Cordray’s appointment.” It applied only to “one court, one case, one company,” he said. But in reality, as reporters noted, the decision was “binding law for any cases” pending in Washington, such as the challenge to the CFPB. The White House’s position outraged members of Congress, including a committee chairman who noted that it was “clear” in light of the D.C. Circuit’s decision that Cordray’s “appointment was also unconstitutional,” “as a number of legal scholars” had likewise “concluded, and accordingly noted that the committee could not legally even “accept testimony from Richard Cordray” given his non-existent legal authority to hold office.

As the D.C. Circuit had noted, “allowing the President to define the scope of his own appointments power,” as the Obama administration wishes, “would eviscerate the Constitution’s separation of powers. The checks and balances that the Constitution places on each branch of government serve as ‘self-executing safeguard[s] against the encroachment or aggrandizement of one branch at the expense of the other.’ . . An interpretation of ‘the Recess’ that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and-consent requirement, giving the President free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction.”

Obama’s invalid appointment of the CFPB’s director is particularly disturbing in light of the CFPB’s vast, uncabined authority (Congress has no control over its budget, it has a virtually standardless grant of authority to regulate the entire financial sector, and its director, once appointed, can’t be replaced by a succeeding president who disagrees with his policies). That sweeping authority is the subject of a pending constitutional challenge CEI joined in State National Bank of Big Spring v. Geithner. As the Federalist Papers make clear, recess appointments were designed for the convenience of the Senate — so senators would not have to come back into town after recessing, to approve short-term appointments. President Obama’s argument twists this purpose inside out and guts the Senate’s ability to review presidential appointments, effectively requiring senators to remain in town, on duty, all the time if they wish to have any say in reviewing the qualifications of presidential appointees.

In addition to violating the Constitution through the Cordray appointment, the Obama administration has also violated the Constitution in various ways through the Dodd-Frank Act that Obama signed into law in 2010 (not just through the CFPB, which Dodd-Frank created and unconstitutionally insulated from political oversight, but also through other entities set up by Dodd-Frank, such as the Financial Stability Oversight Council, whose constitutional violations I discussed earlier in the Washington Post).The Dodd-Frank Act violates constitutional separation of powers safeguards and property rights, harms the U.S. and world economies, and weakens and distorts our financial system.

The D.C. Circuit’s decision calls into question not just Cordray’s holding office at the CFPB, but also his actions while invalidly holding office, all of which are logically null and void. Courts have repeatedly ruled that agency actions are invalid when they are taken, or merely influenced by, invalidly appointed government officials (indeed, one court ruling invalidated a commission’s actions because they might have been influenced by improperly-appointed non-voting officials who merely had an advisory role on the commission. See FEC v. NRA Political Victory Fund, 6 F.3d 821, 824 (D.C. Cir. 1993)).