Obama Administration Appeals Recess Appointment Decision: Cordray’s Fate In The Hands of the Supreme Court (Sort Of)

Obama Administration Appeals Recess Appointment Decision: Cordray’s Fate In The Hands of the Supreme Court (Sort Of)

 by Ashley Hutto-Schultz and Jeffrey E. Jamison

As expected, the Obama administration filed a petition for certiorari asking the Supreme Court to review and overturn the decision by the U.S. District Court for the D.C. declaring President Obama's recess appointments to the National Labor Relations Board ("NLRB"), which took place the same day as Richard Cordray's recess appointment as Director of the CFPB, unconstitutional. In Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan 25, 2013) [an enhanced version of this opinion is available to lexis.com subscribers], the court invalidated President Obama's recess appointments because the Senate was not technically in recess. The court held that (1) the President may exercise recess power only in recesses between Senate sessions ("inter-session"), instead of those falling within Senate sessions ("intra-session"); and (2) that the vacancies to be filled must also first arise during that recess. As readers of this blog know, Senate Republicans have seized on the Canning decision in challenging Director Cordray's appointment, as well as the entire structure of the CFPB.   

In the government's cert petition, U.S. Solicitor General Donald B. Verrilli, Jr., argues that the lower court's decision, "repudiates understandings of the Recess Appointments Clause that have been maintained and relied on by the Executive for most of the Nation's history.  The limitations imposed by the court of appeals would render many of the recess appointments since the Second World War unconstitutional." Given the late date, it is unlikely that, if the Supreme Court agrees to accept the case, that it will be heard before the Court's next term beginning in October.

 Since the  Canning decision was announced in January, the CFPB has repeated the mantra: "CFPB is not a party to the Noel Canning case, and that ruling has no direct effect on the bureau. The bureau continues its essential work of protecting American consumers." The CFPB may be singing a different tune if the Supreme Court accepts cert and affirms the decision in Canning.  Until then, Director Cordray has his own challenge to worry about.

Pending before the D.C. Circuit is a separate challenge to Cordray's recess appointment (State National Bank of Big Spring v. Wolin (No. 12-cv-1032), which has been joined by the attorneys general of several state. That case, however, may not survive a motion to dismiss challenging the plaintiff's standing to the maintain the action: none of the plaintiffs have been or will be subject to any actions by the CFPB. Stay tuned to the CFPB-Lawblog as we follow this developing story.

Read more articles about the Consumer Financial Protection Bureau at Dykema's CFPB Blog

For more information about LexisNexis products and solutions connect with us through our corporate site.

  • Tags: