« Recess at the CFPB? | Main | The Bubble According to Todd »

NLRB and CFPB: Recess Appointments

posted by Adam Levitin

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.]


The comments to this entry are closed.


Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.

News Feed



  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.