In courts across the country, lawyers for business advocacy groups and companies are challenging the validity of the recess appointments President Barack Obama made nearly a year ago to the National Labor Relations Board and the Consumer Financial Protection Bureau.
Federal appellate courts soon will begin to assess the constitutionality of Obama’s picks, which included Richard Cordray to lead the consumer protection agency. Cases are pending in four circuit courts — creating the potential for a divide and a trip to the U.S. Supreme Court.
The U.S. Court of Appeals for the Seventh Circuit last week in Chicago heard one case, and the D.C. Circuit will take up another legal fight, featuring a cadre of prominent Washington lawyers, on December 5. In the D.C. Circuit, Senate Republican leaders tapped Gibson, Dunn & Crutcher partner Miguel Estrada to try to convince the court to nullify Obama’s recess choices. Here’s the issue: Was the Senate in session at the time the president made the appointments? The challengers contend Obama unlawfully circumvented Congress.
“What’s at stake is the ability of the Senate to govern its own proceedings, as the Constitution plainly provides,” said Estrada, co-chairman of the firm’s appellate and constitutional law practice group. “If the administration’s legal theory prevails, there is nothing to stop it from deciding that the Senate is in ‘recess’ for purposes of making recess appointments when the Senate recesses to go to lunch, or recesses over the weekend.”
Estrada, whose nomination to the D.C. Circuit was blocked during the presidency of George W. Bush, will present the case with Jones Day litigation partner Noel Francisco, the leader of the firm’s government-regulation practice. Francisco will argue for the U.S. Chamber of Commerce and for Noel Canning, a division of The Noel Corp. The Yakima, Wash.-based bottler is fighting a labor board order requiring the company to accept a collective-bargaining agreement.
The U.S. Justice Department is bringing its own legal firepower to the litigation, assigning Beth Brinkmann, who leads the Civil Division appellate staff, to argue the recess appointments component of the case. Brinkmann will divide hearing time with labor board attorney Linda Dreeben.
DOJ and NLRB lawyers said Obama’s recess appointments on January 4 occurred during a period in which the Senate “declared itself closed for business.” During the hiatus, the government’s lawyers said, “no legislation was passed, no votes were held and no nominations were considered.”
D.C. Circuit Chief Judge David Sentelle, with judges Karen LeCraft Henderson and Thomas Griffith, will hear the dispute.
Before Obama appointed three people to the labor board, the five-person NLRB was below its quorum, leaving it unable to act. Obama installed Sharon Block, Terence Flynn and Richard Griffin. (Flynn, a Republican, has since resigned.) Republicans had earlier blocked a vote on Cordray’s nomination to lead the new consumer protection agency.
“I refuse to take ‘no’ for an answer,” Obama said in remarks on the day he announced the appointments. “I am not going to stand by while a minority in the Senate puts party ideology ahead of the people we were elected to serve.”
The Senate, at the time, was meeting in pro-forma sessions every three days. That meant, technically, according to critics of the appointments, there was no actual recess.
Forty-two Republican members of the Senate, represented by Estrada, signed a friend-of-the-court brief in the D.C. Circuit in support of Noel Canning. The thrust of the argument: The Senate, not the president, determines when it is in session.
“Like all checks and balances, the Senate’s ability to block appointments — coupled with its prerogative to remain in session and foreclose appointments altogether — means that another branch of government, here the executive, cannot always wield power as it wishes,” Estrada wrote in the brief, filed in late September.
Estrada said presidents are increasingly using the power of the recess appointment “not to fill vacancies on which the Senate cannot act, but to bypass the Senate when it has not acted as the executive wishes.” Pro-forma sessions, he said, have been widely accepted across administrations.
DOJ lawyers argue the January break was no “short intermission in business for a weekend, an evening, or lunch.” The Senate’s pro-forma sessions “lasted for literally seconds,” government lawyers said in their court papers. Under constitutional design, the government’s brief said, the Senate can either remain in session, thwarting the power of the president to make recess appointments, or the Senate can suspend business, allowing the president to make appointments of limited duration. (Cordray’s term expires at the end of 2013.)
RISK OF DISESTABLISHMENT
The merits of Cordray’s appointment are contested in a case pending in the U.S. District Court for the District of Columbia. The State National Bank of Big Spring in June sued the U.S. Treasury Department and other government agencies, challenging the “unconstitutional formation and operation” of the consumer protection agency. Cordray, the suit said, was appointed without the advice and consent of the Senate.
O’Melveny & Myers financial services partner Gregory Jacob, in Washington, represents the Texas community bank. Two advocacy groups, including the Competitive Enterprise Institute, and the states of Michigan, Oklahoma and South Carolina are also plaintiffs. (Jacob declined to comment.)
Wendy Doty of the DOJ Civil Division said, in court papers filed on November 20 asking a trial judge to dismiss the case, that the plaintiffs’ claims are “roving allegations of unconstitutionality.”
If the D.C. Circuit finds that pro forma Senate sessions are enough to shut down recess appointments, “it will be the end of recess appointments except for when the Senate acquiesces,” said Vinson & Elkins appellate litigation partner John Elwood.
Victor Williams, a professor at Catholic University of America Columbus School of Law who has written extensively on recess appointments, said there’s an out for the D.C. Circuit that doesn’t involve a ruling on the merits: a determination that the dispute poses a political question that the courts should refrain from addressing.
Williams filed a friend-of-the-court brief in the D.C. Circuit supporting the National Labor Relations Board, the composition of which is also the target of the legal fight in the Seventh Circuit. (The appeals court on November 30 heard two consolidated cases.)
A decision against the government, Williams said, “would nullify the NLRB. It would be as if Congress had voted for and the president had signed a bill that disestablished the NLRB.”
Mike Scarcella is a reporter for The National Law Journal, a Legal affiliate based in New York.