Richard Cordray

Obama Recess Appointments Slapped Down by DC Circuit, CFPB At Risk

What can only be described as a blockbuster opinion was just handed down by the DC Circuit in the case of Canning v NLRB, the validity of President Obama’s recess appointments has been slapped down. Here is the full opinion. The three judge panel was Chief Judge David Sentelle, Karen Henderson and Thomas Griffith, all Republican appointees (one from each Bush and one Reagan).

The immediate effect of the court’s decision is, of course, on the National Labor Relations Board (NLRB). Noel Canning was aggrieved by a decision of the NLRB and petitioned for review, the NLRB cross-petitioned to have its decision upheld. Fairly standard stuff – except the quorum on the NLRB Board was met only because of the fact Barack Obama controversially recess appointed three members in January 2012, as well as concurrently recess appointing Richard Cordray to be the Director of the Consumer Finance Protection Bureau. So, three out of the five members of the NLRB Board were, according to Canning’s argument, not validly sitting and therefore their decision was invalid as to him

Canning had merits arguments on the specific facts of his individual case, but the court found those non-compelling and proceeded on the Constitutional arguments surrounding the validity of the recess appointments. And the Court agreed with Canning that Obama’s recess appointments were invalid. The discussion by the court can be gleaned from these passages:

All this points to the inescapable conclusion that the Framers intended something specific by the term “the Recess,” and that it was something different than a generic break in proceedings.
….
It is universally accepted that “Session” here refers to the usually two or sometimes three sessions per Congress. Therefore, “the Recess” should be taken to mean only times when the Senate is not in one of those sessions. Cf. Virginia v. Tennessee, 148 U.S. 503, 519 (1893) (interpreting terms “by reference to associated words”). Confirming this reciprocal meaning, the First Congress passed a compensation bill that provided the Senate’s engrossing clerk “two dollars per day during the session, with the like compensation to such clerk while he shall be necessarily employed in the recess.” Act of Sept. 22, 1789, ch. 17, § 4, 1 Stat. 70, 71.

Not only logic and language, but also constitutional history supports the interpretation advanced by Noel Canning, not that of the Board. When the Federalist Papers spoke of recess appointments, they referred to those commissions as expiring “at the end of the ensuing session.” The Federalist No. 67, at 408 (Clinton Rossiter ed., 2003). For there to be an “ensuing session,” it seems likely to the point of near certainty that recess appointments were being made at a time when the Senate was not in session — that is, when it was in “the Recess.” Thus, background documents to the Constitution, in addition to the language itself, suggest that “the Recess” refers to the period between sessions that would end with the ensuing session of the Senate.
….
The Constitution’s overall appointments structure provides additional confirmation of the intersession interpretation. The Framers emphasized that the recess appointment power served only as a stopgap for times when the Senate was unable to provide advice and consent. Hamilton wrote in Federalist No. 67 that advice and consent “declares the general mode of appointing officers of the United States,” while the Recess Appointments Clause serves as “nothing more than a supplement to the other for the purpose of establishing an auxiliary method of appointment, in cases to which the general method was inadequate.” The Federalist No. 67, supra, at 408. The “general mode” of participation of the Senate through advice and consent served an important function: “It would be an excellent check upon a spirit of favoritism in the President, and would tend greatly to prevent the appointment of unfit characters from State prejudice, from family connection, from personal attachment, or from a view to popularity.” The Federalist No. 76, supra, at 456.

Then the blow was delivered: Continue reading

The “Most Transparent Administration Ever” Treats Recess Appointments with Greater Secrecy than Illegal Wiretapping

Charlie Savage just released the OLC opinion he got in response to a FOIA on opinions relating to recess appointments (this became an issue after Obama appointed Richard Cordray head of the Consumer Financial Protection Board using a recess appointment). It is a Jack Goldsmith memo dated February 20, 2004.

It is almost entirely redacted. Just 11 lines out of three pages are left unredacted–and one of those reads, “Please let us know if we may be of further assistance.”

Just for shits and giggles, I compared that memo to another Jack Goldsmith memo, one that relates to actual national security issues: Goldsmith’s May 6, 2004 memo finding the revamped illegal wiretap program legal. That’s a 108 page memo, of which 46 pages are entirely redacted or redacted to the same degree as any one of the three pages in this recess appointment one. There are a slew more redactions, many of them obviously improper.

The last line, “Please let me know if we can be of further assistance. (U)” appears unredacted there, too.

Nevertheless, the Administration redacted far more of the earlier Goldsmith memo–the recess appointment one–than the one dealing with one of our most sensitive counterterrorism programs.

Next up, the Administration is going to start redacting Civics textbooks, because the workings of government are so terribly sensitive.

John Yoo Defends Senate’s Authority to Sit Around and Do Nothing

Yes, it is hysterical, in general, that John Yoo has finally discerned some limits to the President’s authority under Article II now that Obama used a recess appointment to get around Senate obstruction.

The president’s power over what are known as “recess appointments” stems from Article II of the Constitution, which grants him the authority “to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” The Constitution does not define what a “recess” is — the Senate adjourns for short periods of time, and the question becomes when an “adjournment” becomes long enough to turn into a “recess.” In the past, attorneys general and presidents have thought that an adjournment would have to be longer than at least ten days to become a “recess.”

Particularly given that Yoo has embraced a rather expansive notion of what Youngstown says about Presidential authority regarding activities that aren’t defined under existing statute.

I’m amused, too, by the way Yoo trolls for clients at the end of his column.

Most importantly, private parties outside government can refuse to obey any regulation issued by the new agency. They will be able to defend themselves in court by claiming that the head of the agency is an unconstitutional officer, and they will have the grounds for a good test case. They can call Richard first, me second, for advice!

I hope, for NRO’s sake, they get a cut if Yoo does go on to consult with the Chamber of Commerce, which has threatened to sue.

But I’m most amused by what Yoo has to defend to make his case. John Yoo, arch conservative, defends the right of Senators to sit around doing nothing but reading the paper on the taxpayer’s dime.

It is up to the Senate to decide when it is in session or not, and whether it feels like conducting any real business or just having senators sitting around on the floor reading the papers.

I’ll grant you, the Senate is pretty ineffective and it usually feels like they are, in fact, not doing anything. I’m sure they do have the legal authority to just sit around scratching their collective arse. But I do find it rather cute that John Yoo has come out of his hole to make an inspired defense of Article I authority based on Senators’ rights to do absolutely nothing.

This constitutional lawyer business really is a noble profession.

The Challenge To Richard Cordray Not Being Discussed

The internets are alive with the sound of excitement over the appointment today by President Obama of Richard Cordray to be Director of the Consumer Finance Protection Bureau (CFPB). And, as Brian Buetler correctly points out, by doing it today, the first day of the new legislative session, Obama (assuming he gets re-elected) has provided Cordray with the longest term possible to serve as a recess appointee:

By acting today, with session two of this Congress technically under way, Obama has given Cordray the rest of this session and the full next session of the Senate to run the bureau. Cordray could potentially serve through the end of 2013.

The Congressional Research Service outlined this in a recent report (PDF) — and the White House and Senate leaders of both parties confirm the analysis.

If Obama loses in 2012, that could shorten Cordray’s tenure — and of course Cordray can leave early if he wants to. But this move makes it much more likely that the CFPB will truly take root.

Most of the banter so far has been on the viability of Obama’s move to recess appoint in this manner. I have looked at this issue for years, going back to early in the Dawn Johnsen imbroglio, and find no reason to believe this was not a proper exercise of Presidential power and prerogative.

The long and short of it is, there is no restriction on timing of recess appointments by a President pursuant to Article II, Section 2 of the Constitution. Both the “10 day rule”, which got narrowed to the “3 day rule” were practices and, at best were based on non-binding dicta from an early 90s DOJ memo; they are not now, nor have they ever been, binding law or rule. Legally, they are vapor. The issue was actually litigated in the 2004 11th Circuit case of Evans v. Stephens.

And when the President is acting under the color of express authority of the United States Constitution, we start with a presumption that his acts are constitutional.2 See United States v. Allocco, 305 F.2d 704, 713 (2d Cir. 1962) (Recess Appointments Clause case); see also U.S. v. Nixon, 94 S.Ct. 3090, 3105 (1974) (observing “In the performance of assigned constitutional duties each branch of the Government must initially interpret the Constitution, and the interpretation of its powers by any branch is due great respect from the others.”).
…….
The Constitution, on its face, does not establish a minimum time that an authorized break in the Senate must last to give legal force to the President’s appointment power under the Recess Appointments Clause. And we do not set the limit today.

And there you have it. There is no minimum time. Also, somewhat significant, is that Evans was decided by the full 11th Circuit, not a three judge panel, and SCOTUS considered a full cert application, and denied it, leaving the 11th Circuit decision standing as good law and citable precedent.

Oh, and if you wonder if SCOTUS has a real hard on for Presidential recess appointments, the answer would appear to be no. During the oral argument in New Process Steel v. NLRB last year, Chief Justice Roberts scoldingly asked Deputy Solicitor General Neal Katyal “And the recess appointment power doesn’t work why?” I am not sure the blustering Republicans like McConnell and Boehner will find quite as receptive an ear from the Roberts Court as they think.

Well, as Beutler notes, things should be all rosy and good to go for Cordray and CFPB, right? Not so fast, there is another issue not receiving any attention by the chattering classes.

The CFPB was promulgated by a pretty bizarre act – The Dodd Frank Act – bizarre, specifically, in how it structures and empowers the CFPB in its various duties. Notably, several of the key powers flow not necessarily through the agency, but through the “confirmed director” of CFPB. If there is no director, the bureau is run in the interim by the Treasury Secretary. Yep, good ‘ole Turbo Tax Timmeh Geithner. Specifically, Section 1066 provides:

The Secretary is authorized to perform the functions of the Bureau under this subtitle until the Director of the Bureau is confirmed by the Senate in accordance with section 1011. (emphasis added)

So, in all this meantime, and despite the White House trying to put the patina on that Liz Warren was running the CFPB, it has actually been Geithner. And the problem with this has been (remember I said the enabling language was bizarre??) that not all of the full powers of the CFPB vest, nor can they be exercised, until there is a director.

A director “confirmed by the Senate” according to the literal wording of the Dodd Frank Act.

If I were speculating on legal challenges to Cordray, rather than focusing solely on Obama’s ability to so appoint him (which, again, I think stands up), I might be more concerned about the issue of whether Cordray has full powers to lead and operate CFPB because he is not “confirmed by the Senate”. That should be a stupid argument you would think, but the words “confirmed by the Senate” in the enabling act make it at least a very cognizable question.

Normally a confirmed appointee and a recess appointee have the same legal authority and powers but, to my knowledge, there is no other situation in which substantive power for an agency flows only through its specific “confirmed” director. If I were going to attack Cordray, I would certainly not restrict it to the propriety of Obama’s recess appointment, I would also attack his scope of authority since he was not “confirmed”. I would like to think such a challenge fails, but Congress sure left a potential hidden boobytrap here.

How Dare the President Protect Consumers!?!?!

We’ll have to come back to the issue of why President Obama decided to use his recess authority to appoint Richard Cordray to head the Consumer Financial Protection Board but not Dawn Johnsen or Elizabeth Warren. But for now, I’d like to collect the wails of Republican outrage.

Shorter John Boehner: Protecting consumers from rapacious banks is an extraordinary and entirely unprecedented power grab! Protecting consumers is bad for the economy!

Shorter Mitch McConnell: Obama has arrogantly circumvented the American people by protecting the American people!

Shorter Orrin Hatch: It is a very grave decision by this heavy-handed, autocratic White House to appoint someone to protect consumers. The American people deserve to be treated with more respect than this White House is affording them by protecting them from the banks!

Shorter Spencer Bachus: Appointing a director to the CFPB will cripple it for years. The greatest threat to our economy right now is uncertainty, and by protecting consumers the President just guaranteed there will be even more uncertainty.

 

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