The Supreme Court Takes The Laboring Oar

Friday, August 15, 2014 - 14:24

Noel  J. Francisco is chair of Jones Day's Government Regulation Practice. He has testified before the House Committee on the Judiciary, Subcommittee on Commercial and Administrative Law on separation of powers, and administration law reform issues. 

Editor: Before we discuss the Canning decision, please tell our readers something about your background.

Francisco: I grew up in Oswego, NY, on Lake Ontario. From there I went off to the University of Chicago for both college and law school, then onto clerkships here in DC. I ended up spending time in the George W. Bush administration, and then I came here to Jones Day.

Editor: Our focus will be the landmark Noel Canning decision, but you’ve had other big cases. Can you tell our readers about some of them?

Francisco: My partner, Mike Carvin, and I challenged the composition of the Public Company Accounting Oversight Board (PCAOB) on separation of powers grounds. We lost in the D.C. Circuit Court of Appeals but drew a very strong dissent in our favor. The Supreme Court took the case and affirmed the core of our argument, namely, that the way the PCAOB was constituted violated separation of powers principles.

Another case (that didn’t actually get up to the Supreme Court) was our representation of R.J. Reynolds Tobacco Company in a challenge to the FDA’s regulation that would have required cigarette packages to display very gruesome, grizzly and graphic warning labels. We challenged that as violating the First Amendment by forcing tobacco companies to engage in speech against their will. The D.C. Circuit struck down the regulation, and the government chose not to seek Supreme Court review of that decision.

Editor: Turning to Noel Canning, can you walk us through the key issues and the history of the case?

Francisco: In January 2012, President Obama purported to make recess appointments in a way that was truly unprecedented in that the President made recess appointments when the Senate was actually convening sessions (so-called pro forma sessions) every three days. Those pro forma sessions were not new; in fact, Senate Majority Leader Harry Reid used exactly this type of pro forma session to prevent President George W. Bush from making recess appointments. That practice continued into the Obama administration, but President Obama was the first president who declared those pro forma sessions to be constitutional nullities so that he could make recess appointments notwithstanding the fact that the Senate was convening the pro forma sessions every three days. That set the stage for the litigation.

We recognized that this exercise of the recess appointment power was vulnerable, given the circumstances in which it was exercised. Jones Day has a very large labor and employment practice, and the issue generally was very important to our labor and employment clients. So we started following the National Labor Relations Board (NLRB) docket to see when the newly reconstituted Board started exercising its power. We were looking for a vehicle to challenge the President’s recess appointments to the NLRB. The Order that the NLRB issued against the Noel Canning Company was one of the first three Orders that were issued by this newly reconstituted Board. As soon as that Order came down, we reached out to the outside counsel for Noel Canning Company and asked if the Company was interested in bringing a challenge to the Order based on separation of powers principles. They were very interested, and we launched the litigation in the D.C. Circuit.

Editor: How did the case proceed from there?

Francisco: Our principal argument in the D.C. Circuit was the argument that the majority of the Supreme Court, in the opinion by Justice Breyer, ultimately agreed with: namely, that the President didn’t have the authority to disregard these pro forma sessions, and that when the Senate was holding such sessions they prevented the President from exercising his recess appointment power. We argued that, whatever else the recess appointments clause may have meant as an original matter, it surely couldn’t mean that the President has the ability to disregard the Senate’s determinations when the Senate says it’s in session, actually holds sessions and is capable of conducting business if it wants to do so. That was our main argument to the D.C. Circuit. We also raised two additional issues based on an original-understanding interpretation of the Recess Appointments Clause: first, that the President can only make a recess appointment during the period that falls between the Senate’s formal sessions, that is, during an inter-session recess; and second, that the President can only make recess appointments to vacancies that arise during the inter-session recess; and we argued that, if the Court agreed with either of those two interpretations, the NLRB appointments again were unconstitutional.

When we got to the D.C. Circuit for argument, it became quite clear that the judges had no interest in our principal argument. They were much more interested in the historical interpretive arguments. As you know, the D.C. Circuit issued a ruling that was based on the two historical interpretive questions (the meaning of the word “recess” and which types of vacancies were eligible for recess appointments) and didn’t address the principal argument we had advanced (that the President had no authority to disregard pro forma sessions). After the D.C. Circuit issued its ruling, the government sought certiorari in the U.S. Supreme Court. Interestingly, the government only asked the Supreme Court to review the two historical interpretive questions. We’re the ones who said to the Supreme Court, we think you should take this case, but if you take it, you should take the whole case including the validity of these pro forma sessions. The government opposed that request; it didn’t want the court to take up that third issue. The Supreme Court, however, did ultimately take the case and did take all three issues. At the end of the day, a five-justice majority ruled in our favor on our principal issue, that is, the validity of the pro forma Senate sessions. That five-justice majority rejected our positions on the two historical interpretive grounds, but victory on the first ground – which was really the principle we were trying to vindicate – accorded complete relief to our client.

Editor: That’s a great story. Many of our readers are eager to understand the practical impact of your win on recent NLRB actions. To what extent have they been invalidated?

Francisco: I think there are two levels for assessment of the practical impact of the decision. The first level is the impact on the President’s recess appointment power. The second is the impact on the NLRB. In terms of the President’s recess appointment power, I think that the decision will substantially curtail the President’s ability to make recess appointments without the Senate’s consent in the future. So I think the decision is going to have a very important impact on the use of recess appointments.

In terms of the NLRB, the Court’s ruling invalidates every Order that was issued by the unlawfully constituted Board (that’s the Board that existed as of the beginning of January 2012, when the President made the recess appointments, and continued until July 2013, when the Senate actually confirmed members of the NLRB). During that interim period, every Order the NLRB issued is subject to constitutional challenge on the same theory on which we prevailed. I believe that implicates several hundred NLRB Orders. The NLRB is going to have to take action to revisit all of those Orders and decide whether or not to adhere to the positions that they originally took.

Editor: Does that mean only that the particular decisions in those five hundred matters have been invalidated, or that whatever more general legal precedents were enunciated in those orders have been invalidated, too?

Francisco: The NLRB rarely issues general rules or regulations; instead, what they do is announce their positions through individual Orders that apply to individual parties. Those individual Orders may enunciate general principles that the Board fully intends to adhere to in future cases, so in that sense they have precedential value. Once an Order is invalidated, so is everything in that Order, so it has no further prospective precedential effect. Unless and until the Board issues new Orders, there is no general principle that survives from those now-invalid Orders.

Editor: I understand how the decision will change the way presidents seek to make recess appointments, but can we clarify whether this will have equal impact on government agencies other than the NLRB?

Francisco: Absolutely, because the President makes use of recess appointments not just to the NLRB but across the entire federal government. Virtually every agency has been subject to recess appointments. Many military officers and many diplomatic officials have been recess appointed. All those individuals now will be subject to this ruling by the Supreme Court, significantly limiting the circumstances in which the President can make a recess appointment. I think the practical effect is that the President will be able to make recess appointments when the Senate wants him to be allowed to make recess appointments.  But if the Senate wants to insist on the advice-and-consent process, it can insist that the President submit the nomination to the Senate and that the nominee be voted up or down by the Senate before he or she takes office.

Editor: Besides your own caseload, you lead Jones Day’s Government Regulations Practice. Can you tell us something about the scope of this group’s activities and significant current cases?

Francisco: Our government regulation practice does a lot of different things, but several of us here in Washington D.C. do focus on challenges to federal laws and regulations, particularly government overreach. Some of the biggest cases we’ve got going on right now involve challenges to the healthcare law. My partner Mike Carvin just argued both of the cases in the D.C. Circuit and the Fourth Circuit that reached different results on the administration’s regulations implementing Obamacare. We represent many of the Roman Catholic entities challenging the contraceptive mandate issued by the Department of Health and Human Services requiring Catholic organizations to provide insurance coverage for contraception in violation of their sincerely held religious beliefs. We also continue to advise R.J. Reynolds on a host of regulatory issues arising in the tobacco industry. I think something to keep an eye on in the future is the administration’s climate change regulations. We’re also watching very closely the SEC’s rules and regulations because those obviously have a big impact on Jones Day clients and we want to make sure that anything the SEC does in this realm doesn’t exceed the limits of the power that the Congress conferred upon the SEC.

Editor: You’re also a member of Jones Day’s Issues & Appeals practice, which won four U.S. Supreme Court cases last year. But our readers around the country may be more impressed that two of the four lead lawyers were not Washington based. Can you talk about the firm’s efforts to station top appellate lawyers outside the Beltway?

Francisco: That, I believe, is one of the firm’s biggest strengths. Our Issues and Appeals practice has lawyers all over the country that can handle cases from the first district court motion to the final argument in the United States Supreme Court. In the last two years we hired six Supreme Court law clerks each year. When you consider that there are only thirty-six law clerks and many of them go into government or academia, getting six in one year is pretty extraordinary. One of the reasons we’re able to do that is that, in addition to the interesting cases that we have, we place our Issues and Appeals lawyers all over the country so, when somebody coming off of the Supreme Court wants to work in Columbus, Atlanta, Pittsburgh or Dallas, we have Issues and Appeals practices in all those places. I think that gives us a real advantage when it comes to assisting our clients on the types of high-profile issues that go into the Courts of Appeals and ultimately to the United States Supreme Court.

 

Please email the interviewee at nfrancisco@jonesday.com with questions about this interview.