Supreme Court agrees to take on recess appointment controversy

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On June 24, 2013, the U.S. Supreme Court agreed to review the D.C. Circuit’s decision in Noel Canning v. NLRB invalidating President Obama’s January 4, 2012 appointment of three NLRB members. Because Richard Cordray was appointed CFPB Director on the same day and through the same assertion of “recess” appointment authority as the NLRB members at issue in Noel Canning, the Supreme Court’s ultimate ruling will effectively determine the validity of Mr. Cordray’s appointment. A Supreme Court decision can be expected by the end of this year or early next year. For more details on the grant of certiorari, see our legal alert.

All eyes will now be on the Obama Administration, to see whether the Supreme Court’s grant of certiorari (which we thought was a virtual certainty) will impact the Administration’s strategy regarding the President’s renomination of Mr. Cordray as CFPB Director. (Mr. Cordray’s recess nomination term expires at the end of this year.) So far, the Administration and Democrats have resisted the Republicans’ demands for changes in the CFPB’s structure and governance. Those demands include converting the CFPB’s leadership from a single director to a board or commission and subjecting the CFPB to the Congressional appropriations process. Industry groups have already reacted to the certiorari grant by urging Congress to make changes to the CFPB.