Court Nixes Recess Appointments to NLRB; Potential Application to CFPB

On May 16, 2013, the U.S. Court of Appeals for the Third Circuit, in NLRB v. New Vista Nursing Rehab., ruled as unconstitutional the recess appointment process used by President Obama to fill a spot on the National Labor Relations Board (NLRB) during a 2010 intrasession break.The Third Circuit, in a 2-1 decision, reached the conclusion based on similar reasoning as adopted by the U.S. Court of Appeals for the D.C. Circuit in its January 2013 unanimous decision invalidating three other NLRB recess appointments made in 2012 (NLRB v. Noel Canning).These two appellate decisions raise continuing doubts regarding the constitutionality of the recess appointment process used by President Obama to appoint Consumer Financial Protection Bureau Director Richard Cordray.

Separately, on April 25, 2013, the NLRB filed a petition for certiorari in the D.C. Circuit’s decision in the Noel Canning ruling.The split decision in the Third Circuit’s New Vista ruling increases the likelihood that the United States Supreme Court will accept the petition.