On Monday, the Supreme Court granted review of the D.C. Circuit’s recent decision invalidating President Obama’s recess appointment of three members of the National Labor Relations Board (“NLRB”). The case, Noel Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013), has called into question the scope of the President’s authority pursuant to the Recess Appointments Clause, Article II, Section 2, of the U.S. Constitution. A key issue in the case is whether President Obama’s appointments to the NLRB were properly made during a recess of Congress. You can read our previous analysis of the D.C. Circuit’s opinion here.
In addition to clarifying the scope of the recess appointment power exercised by presidents since George Washington, the case has important implications for Richard Cordray, the Director of the Consumer Financial Protection Bureau (“CFPB”). President Obama appointed Director Cordray as the head of the CFPB pursuant to the same authority, and during the same “recess,” as the three members of the NLRB. Since the time of the appointments in January 2012, there have been questions as to the constitutionality of Director Cordray’s appointment, particularly given the complex political and regulatory implications of the CFPB having a Director in place (read more about the implications here).
The Court will only rule on the NLRB appointments and will not directly address Director Cordray’s appointment; however, the precedent set by the Court will affect the outcome of at least one constitutional challenge to Director Cordray’s authority, which has already been filed in federal court.
The Court’s decision to review the Noel Canning decision will be closely watched by industry participants subject to the NLRB’s and CFPB’s authority and, even more significantly, will implicate the future of presidential recess appointments.