NLRB and CFPB: Recess Appointments
The DC Circuit's decision in Noel Canning v. NLRB invalidated an National Labor Relations Board ruling on the grounds that three of the NLRB's five members were not validly appointed, so the NLRB lacked the necessary quorum to act. The DC Circuit's held on two separate grounds that the NLRB members were not validly appointed. All of the NLRB members in question were appointed as so-called "recess" appointments by the President, meaning that they were appointed without the advice and consent of the Senate. First, the DC Circuit held that these appointments were invalid because they were appointed under the Recess Appointments power at a time when the Senate was not in recess. And second, the DC Circuit held that the appointments were invalid because the Recess Appointments power only applies to vacancies that arise during a recess, not vacancies that are continuing during a recess, and the vacancies in question arose before the (non-)recess. The ruling is based on the DC Circuit's close textual reading of the Recess Appointments clause of the Constitution (in particular, the use of the term "the Recess" instead of "a Recess"), but is also butressed by policy arguments.
While I don't like the result of the decision, it doesn't read as a strained or flagrantly political decision (unlike Business Roundtable v. SEC, say), even if the panel was all GOP appointees. I assume the decision will get appealed and would think there's a reasonable chance that certiorari will be granted by the Supreme Court, but there's a real chance that the decision will stand either because certiorari won't be granted or because the Supreme Court will affirm.
If that happens, it means real problems not just for the NLRB, but also for the CFPB, as Director Cordray is also currently servicing as a recess appointment. Even if Cordray's renomination gets confirmed by the Senate, all of the CFPB's rulemakings and Directorial actions since the recess appointment would seem to be invalid. I don't know what affect that has on litigation settlements or appointments and administrative matters, but looking through Title X of the Dodd-Frank Act, there are an awful lot of things that the Director, rather than the Bureau are supposed to do. I suppose that a confirmed (or properly recess-appointed) Director would be able to readopt rulemakings and administrative decisions fairly easily, but I suspect it couldn't be on a nunc pro tunc basis. There's more litigation to happen, but this could be a real mess.
[Update: Deepak Gupta has a post on this issue suggesting that some CFPB actions could be protected by the de facto officer doctrine. I hope he's correct, but I don't find the Supreme Court's latest statement on the doctrine especially encouraging. The Court recognizes that the doctrine exists, and there's certainly some dicta to cling to, but the Court declined to apply the doctrine in that case in order to uphold convictions that were affirmed by improperly appointed judges. Now, there might be a difference in the application of the doctrine as between adjudication and rulemaking, but because the NLRB case involves an adjudication, rather than a rulemaking, the Court might not address the distinction, leaving that for subsequent litigation. In any case, the doctrine is only what the Court wants to make of it, and I worry that the NLRB might not be the best agency for teeing up the issue before this particular Court.]