Obama made the recess appointments after Senate Republicans blocked his choices for an agency they contended was biased in favor of unions. Obama claims he acted properly because the Senate was away for the holidays on a 20-day recess. The Constitution allows for such appointments without Senate approval when Congress is in recess.
But during that time, GOP lawmakers argued, the Senate technically had stayed in session because it was gaveled in and out every few days for so-called pro forma sessions.
GOP lawmakers used the tactic as Democrats had done in the past specifically to prevent the president from using his recess power to install members to the labor board and the consumer board. They had also vigorously opposed the nomination of Cordray. The White House argued that the pro forma sessions some lasting less than a minute were a sham.
The three-judge panel, all appointed by Republican presidents, flatly rejected arguments from the Justice Department's Office of Legal Counsel, which claimed the president has discretion to decide that the Senate is unavailable to perform its advice and consent function.
"Allowing the president to define the scope of his own appointment power would eviscerate the Constitution's separation of powers," Chief Judge David Sentelle wrote in the 46-page ruling. He was appointed by Republican President Ronald Reagan.
The court ruled that during one of those pro forma sessions on Jan. 3, the Senate officially convened its second session of the 112th Congress, as required by the Constitution.
Sentelle's opinion was joined by Judge Thomas Griffith, appointed to the court by President George W. Bush, and Karen LeCraft Henderson, who was appointed by President George H.W. Bush.
"With this ruling, the D.C. Circuit has soundly rejected the Obama administration's flimsy interpretation of the law, and (it) will go a long way toward restoring the constitutional separation of powers," said Sen. Orrin Hatch, R-Utah.
GOP House Speaker John Boehner welcomed the ruling as "a victory for accountability in government."
If the ruling stands, it means that hundreds of decisions issued by the board over more than a year would be invalid. It also would leave the five-member labor board with just one validly appointed member, effectively shutting it down. The board is allowed to issue decisions only when it has at least three sitting members.