Richard Cordray stands left as President Barack Obama announces in the State Dining Room of the White House in Washington, Thursday, Jan. 24, 2013, that he will re-nominate Cordray to lead the Consumer Financial Protection Bureau, a role that he has held for the last year under a recess appointment, and nominate Mary Joe White to lead the Security and Exchange Commission (SEC). (AP Photo/Carolyn Kaster)
Richard Cordray stands left as President Barack Obama announces in the State Dining Room of the White House in Washington, Thursday, Jan. 24, 2013, that he will re-nominate Cordray to lead the Consumer Financial Protection Bureau, a role that he has held for the last year under a recess appointment, and nominate Mary Joe White to lead the Security and Exchange Commission (SEC). (AP Photo/Carolyn Kaster)
WASHINGTON (AP) ? In a setback for President Barack Obama, a federal appeals court ruled Friday that he violated the Constitution in making recess appointments last year, a decision that could severely curtail the president's ability to bypass the Senate to fill administration vacancies.
The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said Obama did not have the power to make three recess appointments to the National Labor Relations Board because the Senate was officially in session ? and not in recess ? at the time. If the decision stands, it could invalidate hundreds of board decisions made over the past year.
The court also ruled that the president could only make recess appointments if the openings arise when the Senate is in an official recess, which it defined as the once-a-year break between sessions of Congress.
White House press secretary Jay Carney said the administration strongly disagrees with the decision and that the NLRB would continue to conduct business as usual, despite calls by some Republicans for the board members to resign.
"The decision is novel and unprecedented," Carney said. "It contradicts 150 years of practice by Democratic and Republican administrations."
The Justice Department hinted that the administration would likely appeal the decision by three conservative judges appointed by Republican presidents to the U.S. Supreme Court. "We disagree with the court's ruling and believe that the president's recess appointments are constitutionally sound," the statement said.
The court's decision acknowledges that it conflicts with what other federal appeals courts have held about when recess appointments are valid, which only added to the likelihood of an appeal to the high court.
The ruling also threw into question the legitimacy of Obama's recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau. Cordray's appointment, also made on Jan. 4, 2012, has been challenged in a separate case.
Carney insisted the court's ruling affected only one case before the labor board and would have no bearing on Cordray's appointment. Obama on Thursday renominated Cordray for the job.
The court's decision is a victory for Republicans and business groups that have been attacking the labor board for issuing a series of decisions and rules that make it easier for the nation's labor unions to organize new members.
Obama made the recess appointments after Senate Republicans blocked his choices for an agency they contended was biased in favor of unions. Obama claims he acted properly because the Senate was away for the holidays on a 20-day recess. The Constitution allows for such appointments without Senate approval when Congress is in recess.
But during that time, GOP lawmakers argued, the Senate technically had stayed in session because it was gaveled in and out every few days for so-called pro forma sessions.
GOP lawmakers used the tactic ? as Democrats had done in the past ? specifically to prevent the president from using his recess power to install members to the labor board and the consumer board. They had also vigorously opposed the nomination of Cordray. The White House argued that the pro forma sessions ? some lasting less than a minute ? were a sham.
The three-judge panel, all appointed by Republican presidents, flatly rejected arguments from the Justice Department's Office of Legal Counsel, which claimed the president has discretion to decide that the Senate is unavailable to perform its advice and consent function.
"Allowing the president to define the scope of his own appointment power would eviscerate the Constitution's separation of powers," Chief Judge David Sentelle wrote in the 46-page ruling. He was appointed by Republican President Ronald Reagan.
The court ruled that during one of those pro forma sessions on Jan. 3, the Senate officially convened its second session of the 112th Congress, as required by the Constitution.
Sentelle's opinion was joined by Judge Thomas Griffith, appointed to the court by President George W. Bush, and Karen LeCraft Henderson, who was appointed by President George H.W. Bush.
"With this ruling, the D.C. Circuit has soundly rejected the Obama administration's flimsy interpretation of the law, and (it) will go a long way toward restoring the constitutional separation of powers," said Sen. Orrin Hatch, R-Utah.
GOP House Speaker John Boehner welcomed the ruling as "a victory for accountability in government."
If the ruling stands, it means that hundreds of decisions issued by the board over more than a year would be invalid. It also would leave the five-member labor board with just one validly appointed member, effectively shutting it down. The board is allowed to issue decisions only when it has at least three sitting members.
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.
"I think this is a very important decision about the separation of powers," said Carl Tobias, a constitutional law professor at the Virginia's University of Richmond. "The court's reading has limited the president's ability to counter the obstruction of appointments by a minority in the Senate that has been pretty egregious in the Obama administration."
Sen. Tom Harkin, D-Iowa, urged the NLRB to continue conducting business until the Supreme Court rules on the issue.
"Today's circuit court decision is not only a radical departure from precedent, it ignores the fact that President Obama had no choice but to act," Harkin said. "Throughout his presidency, Republicans have employed unprecedented partisan delay tactics and filibusters to prevent confirmation of nominees to lead the NLRB, thus crippling the board's legal authority to act."
If Obama's recess appointment of Cordray to the newly created consumer board is eventually ruled invalid, it could nullify all the regulations the consumer board has issued, many of which affect the mortgage business.
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Follow Sam Hananel on Twitter: http://twitter.com/SamHananelAP
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