With the legitimacy of more than 500 labor-management decisions at stake, the U.S. Supreme Court on Tuesday appeared divided over whether the vacancy-hobbled National Labor Relations Board can operate with only two of its five board members.
"We have to decide whether it is OK for two members to set the most major policies or whether they can't conduct even the simplest adjudications," said Justice Stephen Breyer during arguments in New Process Steel L.P. v. National Labor Relations Board.
The board has been operating for nearly 27 months with just two members: Democratic-appointed Chairwoman Wilma Liebman and Republican-appointed member Peter Schaumber. Following board tradition, Liebman and Schaumber have agreed to resolve only those cases in which they can agree --586 so far, according to the government's most recent count -- and to set aside controversial or policy-making cases until the board has at least three members.
The New Process Steel case is a classic statutory interpretation challenge for the justices. At its core is Section 3(b) of the National Labor Relations Act, which states that the "Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise." It also provides that "three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group" to which the board has delegated its powers.
Based on the arguments and justices' comments, the case's outcome may well turn on the significance of the phrase beginning with the word, "except."
The high court challenge stems from actions by the board toward the end of 2007 when it had four members and one vacancy. Anticipating that the terms of two of the four members were about to expire, the board delegated powers to three of its four members, as authorized by Section 3(b). Two of that three-member group -- Liebman and Schaumber -- would remain in January 2008 and be the quorum needed to do business, even though the three-member group no longer existed.
During Tuesday's arguments, Sheldon Richie of Richie & Gueringer in Austin, Texas, counsel to the New Process Steel, told the justices that the statute clearly states that the board must have a quorum of three "at all times." In January 2008, when the three-member group created by the board's delegation of power dropped to two members, he said, the group's authority to act lapsed.
A skeptical Justice Antonin Scalia voiced concern about what the argument would mean to the functioning of the board. Richie responded that the remedy here "is for Congress or the President to act."
President Obama has nominated three persons to the board, but those nominations are being blocked by Senate Republicans opposed to union lawyer Craig Becker's nomination. There has been speculation that Obama may make a recess appointment during Congress' Easter break.
Breyer asked Richie why the Court should read the statute his way. "I can think of reasons why it shouldn't be read that way," he said, noting, for example, that Richie's interpretation would "wreak havoc" in the board's operation.
But Richie insisted, "It is important to have a robust debate and the potential for dissent. Here you have two members who have publicly said they have sometimes compromised their views just to keep the doors open."
Deputy Solicitor General Neal Katyal also faced aggressive and skeptical questioning. He argued that "the plain text controls this case," emphasizing that the text allows the board to delegate its powers to a three-member group, which was done here, and the "special quorum" provision permits a two-member quorum of that group.
"In this case, faced with a vacancy crisis, the board validly delegated power to three members," Katyal said.
But Scalia interjected, "Knowing it would shortly become two. That seems to me a very strange procedure. It doesn't seem to you like an evasion of the quorum requirement?
"No," Katyal said. "It's what the special quorum provision allows."
Chief Justice John Roberts Jr. posed a hypothetical of a five-member board with three Democratic appointees and two Republican appointees. "Could the three Democratic members delegate the board's powers to themselves, cutting out the three Republican members?" he asked.
"You can have those machinations," Katyal conceded. "There are ways to prevent that situation." He said the hypothetical Democratic members could be removed for cause.
"Who would remove them?" asked Roberts. Katyal responded, "The president." But Roberts countered, "What if he is perfectly happy with the situation?" Katyal suggested the courts of appeals, which review board rulings, might act and Congress might use the board's budget.
Justice Samuel Alito Jr. suggested the current situation has changed the decision-making process at the board. He said there is now no opportunity for full board review of cases and there have been decisions where the two members "have split the difference."
Katyal responded, "I'm not suggesting a two-member board is ideal. Faced with a vacancy crisis, the board did the prudent thing."
Scalia asked when the board was likely to drop to only one member. Katyal said Schaumber's term expires on Aug. 27.
"At which time there will be some pressure on Congress to do something," said Scalia with some sarcasm.