In a bombshell decision on the limits of executive power, a federal appeals court panel in Washington, D.C., has invalidated President Obama's recess appointments to the National Labor Relations Board.
Legal experts say the court's reasoning upends decades of conventional wisdom and deals a big victory to Senate Republicans in an era of congressional gridlock.
The case was brought by a Pepsi-Cola bottling company in a fight with a union. The company, Noel Canning, sued to challenge a decision by the Labor Relations Board, arguing that three board members were appointed in violation of the U.S. Constitution.
Without those three members who arrived in January 2012 after Obama bypassed the Senate the board would have no quorum and would essentially be out of business.
"We have a system of rules in this country that confine executive power, and the courts stand ready to enforce those lines when they're crossed," said Noel Francisco, a lawyer at the Jones Day firm who argued the case for the company and the U.S. Chamber of Commerce.
The judges on the appeals court panel all named by Republican presidents answered two big questions.
"The first," Francisco said, "is when is the recess appointment power triggered in the first place? And there what the court said was that it only is triggered during intersession recesses."
By that, he means recesses between sessions of Congress not those short breaks so common these days.
The court added that the Senate, not the president, got to decide what it meant by a recess.
"Allowing the President to define the scope of his own appointments power would eviscerate the Constitution's separation of powers," wrote Judge David Sentelle for the court majority. "An interpretation of 'the Recess' that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and-consent requirement, giving the President free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction. This cannot be the law."
Senate Republicans raced to embrace the decision, which came only a day after lawmakers reached a compromise on the use of the filibuster. Senate Minority Leader Mitch McConnell of Kentucky intervened in the lawsuit along with more than 40 other senators.
Sen. Mike Lee of Utah, who refused to vote for any other Obama nominees after the recess appointments last year, called it a "vindication of the principled stand I have taken."
The court's next holding went even further, lawyer Francisco said, to cover "what types of vacancies are eligible for recess appointments in the first place."
Two judges on the panel, Sentelle and Karen LeCraft Henderson, said under their reading of the Constitution, the vacancy had to actually arise during the recess, or else no dice.
The third judge, Thomas Griffith, said the court didn't need to go that far. He pointed out that until Friday's ruling, the understanding about the kinds of vacancies open to recess appointments dated all the way back to the 1820s.
"We should not dismiss another branch's longstanding interpretation of the Constitution when the case before us does not demand it," Griffith said.
John Elwood, a Washington lawyer who has studied the recess appointment power for years, called this "a very, very broad ruling that, if it stands, will significantly diminish the president's recess appointment power."
Elwood, now at the Vinson & Elkins law firm, said the decision unsettles decades of conventional wisdom about the practice, which has been used by both Republican and Democratic presidents at least 280 times to get around Senate gridlock and appoint agency heads and other executive branch officials.
The ruling also puts a legal cloud over more than 100 actions the Labor Relations Board has taken since last year. But legal experts say each company involved would have to file its own lawsuit to throw out those actions, which could take some time.
The uncertainty extends to the Consumer Financial Protection Bureau, whose leader, Richard Cordray, was appointed on the same day as the NLRB members.
Sam Kazman, a lawyer who represents a plaintiff in a lawsuit challenging the constitutionality of the Dodd-Frank financial overhaul and the creation of the financial protection bureau, said, "We're confident that Mr. Cordray's appointment will meet the same fate as those NLRB members. They will be remembered as the Not-So-Fab Four of the Appointments Clause."
White House spokesman Jay Carney said the president "strongly but respectfully disagrees with the ruling."
"It basically calls into question 150 years of precedent," Carney told reporters Friday afternoon.
The Justice Department had no immediate word on an appeal. But Lynn Rhinehart, the general counsel at the AFL-CIO, had this to say: "This is one decision that we think is so far out there that we really expect to see it reversed."
The decision conflicts with a holding by the U.S. Court of Appeals for the 11th Circuit in Atlanta, and lawyers for both sides expect the case to wind up in the U.S. Supreme Court.