June 24, 2013

High court to hear Obama recess appointments case

The Associated Press

(Continued from page 1)

In taking up the case, the court said it would also consider the narrower question of whether recess appointments can be made during pro forma sessions — where one senator gavels in and out for a few minutes every three days. The appeals court did not address the issue of how short a break can count as a recess.

The case challenging the appointments was brought by Noel Canning, a Washington state bottling company, which claimed an NLRB decision against it was not valid because the board members were not properly appointed and that the board did not have enough members to do business without the improperly appointed officials.

Since the Canning decision, a second federal appeals court in Philadelphia issued a similar opinion finding that recess appointments can be made only between sessions of the Senate. But on three earlier occasions, federal appeals courts have upheld recess appointments.

If the latest rulings stand, they could invalidate more than 1,600 NLRB decisions, and call into question the legitimacy of enforcement actions by the Consumer Financial Protection Bureau, many of which affect the mortgage industry.

The NLRB would effectively be shut down as a ruling against the administration would leave the board with only one member, and it needs three to conduct business.

The Consumer Financial Protection Bureau likewise would have to cease all investigations against mortgage lenders and other financial entities.

"It's going to be sheer chaos," said Alan Kaplinsky, a consumer financial services attorney based in Philadelphia. "If the court determines it was not valid, then literally almost every act taken by the CFPB since January 2012 will be under a huge cloud of uncertainty."

Obama used the recess appointment to install Deputy Labor Secretary Sharon Block, union lawyer Richard Griffin and NLRB counsel Terence Flynn to fill vacancies on the labor board, giving it a full contingent for the first time in more than a year. Block and Griffin are Democrats, while Flynn is a Republican. Flynn stepped down from the board last year.

The parties' roles were reversed when a Republican President George W. Bush was in the White House and Democrats controlled the Senate in the final two years of Bush's presidency. Then, Senate Majority Leader Harry Reid employed the same tactic of convening the Senate every few days to keep Bush from filling vacancies through recess appointments. Unlike Obama, Bush did not press the issue.

 

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