“Considering the text, history and structure of the Constitution, these appointments were invalid from their inception,” said the three-judge decision, written by U.S. Circuit Judge David Sentelle.
The decision bolsters a series of GOP complaints that Obama is refusing to enforce laws that he does not like. For example, he has declined to enforce numerous immigration laws and a pro-marriage law.
The Jan. 25 ruling came after Republican senators filed a case arguing that Obama did not have the power to appoint top-level officials via a “recess appointment” if the Senate says it is in session.
Obama made that claim when he announced the appointment of two people to the National Labor Relations Board in January 2012.
The appointments allowed the board to subsequently issue a series of pro-labor, anti-business decisions. Following the court’s ruling, the board’s decisions are now vulnerable to a series of lawsuits.
Obama used the same claim to appoint Democratic lawyer Richard Cordray to head the new Consumer Financial Protection Bureau in January 2012.
Cordray’s appointment allowed the bureau — whose processes and decisions are largely immune from congressional or judicial oversight — to issue a series of regulations on the financial sector that subordinate their profit-seeking goals to the federal government’s political goals.
For example, the bureau has issued a rule which disadvantages banks that charge higher interest rates to unreliable borrowers. Without that basic ability to raise or lower interest rates, banks will try to protect their shareholders by minimizing lending to risky borrowers, or by raising interest rate on all borrowers, including diligent and reliable borrowers.
Friday’s court decision suggests that Cordray’s appointment may be ruled invalid, likely triggering another set of lawsuits against the bureau’s regulations and rules.
The court decision is Noel Canning v. National Labor Relations Board. It can be found at the U.S. Court of Appeal Court’s website.