Cordray’s Recess Appointment Continues to Cause Controversy

By: Tori K. Shinohara

On January 4, President Obama made several recess appointments, including the appointment of Richard Cordray as the first director of the CFPB. After facing harsh criticism, an Office of Legal Council (OLC) memorandum opinion was released on January 12, justifying the constitutionality of the appointments in question.

Under the Recess Appointments Clause of the Constitution, the President can make appointments without the traditional advice and consent of the Senate during a recess. Neither house of Congress can recess for more than three days without the consent of the other and no concurrent resolution of adjournment has been introduced since May 12, 2011. To circumvent this requirement, Congress holds so-called pro forma sessions to interrupt an extended break. Such sessions are extremely brief, often lasting no more than a minute and requiring the presence of only one Congressperson. Critics of the recess appointments argue that because the Senate pro forma sessions broke up the longer recess, the appointments were unconstitutional. Conversely, the OLC memo concludes:

Although the Senate will have held pro forma sessions regularly from January 3 through January 23, in our judgment, those sessions do not interrupt the intrasession recess in a manner that would preclude the President from determining that the Senate remains unavailable throughout to receive communications from the President or participate as a body in making appointments.

To support this conclusion, the memo examines past Attorney General opinions, historical practice, and existing judicial authority (albeit limited). Notably, the memo points out that recess appointments are hardly uncommon – the last five Presidents have all made recess appointments “during intrasession recesses of fourteen days or longer.” Yet the use of pro forma sessions, if viewed as an interruption in the twenty-day recess, would mean that President Obama exercised his appointment power during a recess of only a few days.

The release of the Justice memo did little to pacify opponents of the January 4 recess appointments. Instead, Congressman Jeff Landry responded by introducing a bill designed to eliminate the perceived abuse of the recess appointments power. Entitled the Executive Appointments Reform Act, the legislation would prevent any regulations promulgated by the CFPB from becoming final until the Senate confirms a director.

Specifically, the proposed legislation would amend Dodd-Frank to state, “No rule, order, or other administrative action shall be considered final if the Director was appointed during a recess of the Senate . . . until the Director has been confirmed by the Senate.” Additionally, if the bill passes, Cordray would not be paid until he has been confirmed by the Senate (and voluntary service is prohibited). Needless to say, the bill’s enactment would hamper the CFPB’s efforts to implement its directive and leave it without a director yet again. However, President Obama would be unlikely to sign such a bill and Republicans may have trouble garnering enough support to override a veto.

In addition to the threat of Congressional backlash, Cordray’s recess appointment may also be vulnerable to judicial challenge. Recess appointments to the NLRB made in conjunction with Cordray’s have already been contested as part of an existing lawsuit.

Even if no one brings a judicial challenge to the appointment itself, any rule the CFPB issues pursuant to a Dodd-Frank provision requiring a director might be vulnerable to challenge. If the constitutionality of Cordray’s appointment gets to court, the outcome is far from certain. Even the OLC memo concedes, “Due to this limited judicial authority, we cannot predict with certainty how courts will react to challenges of appointments made during intrasession recesses, particularly short ones.”

In the meantime, Cordray’s appointment is important because under Dodd-Frank, some of the CFPB’s rulemaking authority was not triggered until the appointment of a director. Now that Cordray is in place, we expect to see even more activity from the CFPB.

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