Court rules Obama’s recess appointments are illegal and unconstitutional…

The Obama administration may have to rethink how it goes about trying to bypass the traditional Senate approval process for filling slots at top government agencies.

That’s because a three-judge panel in a federal appeals court on Friday unanimously ruled that the White House violated the constitution and did not have the power to make recess appointments and fill vacancies in 2012 to the National Labor Relations Board, the U.S. agency responsible for safeguarding workers’ rights.

Because the NLRB nominees could not receive the filibuster-proof 60 votes needed to be approved by the Senate, Obama last year employed a rarely used presidential maneuver to appoint his candidates. Obama argued that the White House acted appropriately because the appointments were made during a recess while the Senate was away for the holidays for 20-days.

However, seeking to block the appointments Republicans set up so-called pro forma legislative sessions of Congress — sessions that are sometimes only seconds long and in which no business is conducted. The three-judge panel ruled that the Senate technically stayed in session during the pro formal sessions and was not in recess.

The Obama administration reportedly is expected to appeal the decision, which is viewed as a major setback for Obama, in part, because it also throws into question the appointment last year of Richard Cordray to head a recently formed consumer mortgage and credit product watchdog agency set up after the financial crisis. Cordray was also nominated during one of these pro-forma sessions.

Donald Lamson, partner at Shearman & Sterling in Washington, said the decision will clearly impact the Cordray appointment last year because the consumer bureau chief was also appointed during a pro forma session. However, Lamson added that it could also have a broader impact on recess appointments in general.

“If you allow recess appointments when there isn’t really a recess, then the Congress wouldn’t have an opportunity to exercise its advise and consent authority,” Lamson said. “There has to be a point where a recess appointment is not available. The question is where is that point and here the court said the recess the White House chose is not valid.”

Lamson noted that the decision could impact a suit brought by a Texas community bank against the Consumer Financial Protection Bureau, where Corday is the chairman. “The filers of that suit may say to its court, take this into account, this is binding,” he said.

The decision could also have an impact on rules made by the labor relations board. A National Association of Manufacturers vice president, Joe Trauger, said in a statement that the organization will be ” reviewing the opinion thoroughly to determine what impact this significant development will have on any and all decisions made by the [labor relations] board over the past year.” Any rejection of Cordray’s appointment could have a similar impact on the consumer bureau’s rules.

The appeals court, the U.S. Court of Appeals for the D.C. Circuit, has already been a thorn in the side of the Obama administration in the past. In July, 2011 it threw out a Securities and Exchange Commission rule that sought to give investors more power over corporate boards. That ruling said the SEC failed to conduct an adequate cost-benefit analysis, a situation that many observers said has complicated and delayed other rule-writing efforts at the SEC.

[by Ron Orol, writing for MARKETWATCH]


As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis



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