United States: Supreme Court Decision Alert - June 26, 2014

Today (June 26, 2014), the Supreme Court issued one decision, described below, of interest to the business community.

Constitutionality of Recess Appointments

National Labor Relations Board v. Noel Canning, No. 12-1281 (described in the June 24, 2013, Docket Report)

The Recess Appointments Clause of the Constitution gives "[t]he President . . . Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session." Art. II, § 2, cl. 3. Today, a five-Justice majority of the Supreme Court held that: (1) the President's recess-appointment power may be exercised during any recess—intra-session or inter-session—of sufficient length; (2) the President may use that power to fill any position that is vacant during the recess, no matter when the vacancy arose; and (3) the Senate is in session when it says it is, provided that, under its own rules, it retains the capacity to transact Senate business—even if the sessions are "pro forma," lasting for a brief time with no business transacted.

The practical effect of today's decision is to return the rules governing recess appointments to what they were believed to be before President Obama adopted a significantly broader view of that authority in January 2012 (by contending that that the Senate's pro forma sessions could be disregarded). Those rules give the Senate the ability to block all recess appointments by convening for pro forma sessions—a practice that began under the Bush Administration and has continued in the Obama Administration. The recess-appointment power has receded into practical irrelevance as a result of this practice and today's decision likely cements that reality.

On January 4, 2012, President Obama invoked the Recess Appointments Clause and appointed three individuals to fill vacant seats on the National Labor Relations Board. The appointments came after the Second Session of the 112th Congress began, during an intra-session adjournment in which the Senate convened every three days for short, pro forma sessions without conducting any substantive business. All three NLRB vacancies had arisen before the conclusion of the First Session of the 112th Congress.

Shortly after these recess appointments, a three-member panel of the NLRB affirmed a decision by an administrative law judge holding that Respondent Noel Canning had committed an unfair labor practice. Noel Canning filed a petition for review of the NLRB order in the D.C. Circuit, contending that the President's appointments were invalid because the Senate was not in recess within the meaning of the Recess Appointments Clause when the NLRB appointments were made.

The D.C. Circuit granted Noel Canning's petition and vacated the NLRB's order, holding that the recess-appointment authority can be used only during the recess that occurs between the separate enumerated sessions of the Senate (a recess that in current practice lasts only for several minutes and occurs once every two years), and not during any mid-session breaks. That part of the ruling was unanimous. A two-judge majority further ruled that the vacancy-filling power applies only to vacancies that arise during the formal recess between enumerated sessions, and not to any vacancies that pre-date the recess.

The Supreme Court unanimously affirmed the determination that the President had exceeded his authority under the Recess Appointment Clause, but divided 5-4 on the reasons why.

The majority opinion, written by Justice Breyer for himself and Justices Kennedy, Ginsburg, Sotomayor, and Kagan, found the relevant constitutional text ambiguous, and the Court looked largely to historical practice to support its conclusions that (1) the phrase "the Recess of the Senate," Art II, § 2, cl. 3, applies to both inter-session and intra-session recesses, and (2) the phrase "Vacancies that may happen during the Recess of the Senate," Art. II, § 2, cl. 3, applies to both vacancies that first come into existence during a recess and vacancies that initially occur before a recess but continue to exist during the recess.

The Court went on to hold that the Senate's determination regarding when it is in session is controlling, except that when it is without the capacity to act based on its own rules, it is not in session even if it so declares. Applying this standard, the Senate was in session during the pro forma sessions at issue: It said that it was in session, and the Senate rules make clear that it could have conducted business. Because the pro forma sessions at issue qualify for purposes of the Recess Appointments Clause, President Obama made the appointments at issue during a 3-day recess, which, the Court determined, is too short a period to bring the recess within the scope of the Clause. President Obama therefore lacked authority to make these appointments.

Justice Scalia concurred in the judgment, writing for himself, Chief Justice Roberts, and Justices Thomas and Alito. In their view the plain, original meaning of the constitutional text limits the President's recess-appointment power to the recess between two formal legislative sessions and permits exercise of that power solely to fill offices that become vacant during that recess.

The Supreme Court's decision calls into question not only every final decision by the NLRB from January 4, 2012, until the Senate confirmation of the President's NLRB nominees on July 30, 2013, but also decisions by other federal agencies—notably the Consumer Financial Protection Bureau, whose Director was given a recess appointment by the President at the same time and under the same circumstances as the NLRB members and was not confirmed until July 16, 2013. As explained in our analysis of the D.C. Circuit's Noel Canning opinion (at pages 2-5), actions by these officials prior to their confirmations that have been subject to a timely judicial challenge on the basis of the invalidity of the recess appointments will almost certainly be set aside.  Actions that have not been challenged may be subject to invalidation, but it is also possible that procedural barriers may leave those actions in place.

Please visit us at www.appellate.net

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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