WASHINGTON A second circuit court ruling invalidating one of President Obama’s recess appointments to the National Labor Relations Board could provide additional ammunition to anyone inclined to challenge the validity of his choice to lead the Consumer Financial Protection Bureau, according to new analysis by Ballard Spahr’s Consumer Financial Services Group.
In NLRB v. New Vista Nursing and Rehabilitation, a divided Third Circuit panel invalidated an NLRB order against New Vista. The panel held that board member Craig Becker, who participated in the NLRB order, had been improperly appointed under the Recess Appointment Clause (RAC) of the Constitution on March 27, 2010, during a two-week Senate adjournment. Earlier this year, the U.S. Court of Appeals for the D.C. Circuit concluded in Noel Canning v. NLRB that the president acted unconstitutionally when he made three “recess” appointments to the NLRB in 2012.
Challenges to NLRB recess appointments are pending in other circuits as well, and the Solicitor General has filed a petition for certiorari in the D.C. Circuit case.
According to Ballard Spahr, the decisions of both the D.C. Circuit and the Third Circuit panel also have implications for the CFPB, since its director, Richard Cordray, was similarly appointed during a Senate recess. The firm said both decisions increase the likelihood that the U.S. Supreme Court will grant certiorari in Noel Canning, as well as the likelihood that CFPB actions will be challenged based on Cordray’s appointment. Both decisions hold that the RAC applies only to intersession recesses, not to intrasession recesses, with some differences in circumstances, the firm added.
