748 F.Supp.3d 497
E.D. Mich.2024Background
- YAPP USA Automotive Systems, Inc. faces two consolidated NLRB proceedings over alleged unfair labor practices related to union organizing and employee discharge.
- YAPP seeks to enjoin the NLRB administrative hearings, arguing the Board’s structure and proceedings are unconstitutional.
- YAPP claims that both the NLRB members and ALJs are impermissibly protected from presidential removal, making the agency’s actions unlawful.
- YAPP also contends that the damages sought by the NLRB (make-whole relief including pecuniary loss) violate its Seventh Amendment right to a jury trial.
- The court considered YAPP’s motion for preliminary injunction based on briefings, without further oral argument.
- The court denied the motion, holding the constitutional challenges were not likely to succeed and no irreparable harm was shown.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Presidential removal protections for NLRB Board | Board members are unconstitutionally insulated from presidential removal (violates Article II/Seila Law) | NLRB structure falls under established Humphrey’s Executor exception for multi-member agencies | NLRB Board removal protections are constitutional under binding precedent |
| Removal protections for NLRB ALJs | NLRB ALJs are impermissibly protected by multiple layers of removal restrictions (violates Free Enterprise Fund) | ALJs perform adjudicative (not executive) functions; good-cause protections for inferior officers are constitutional | Protections for NLRB ALJs are constitutional; not likely to succeed on merits |
| Right to jury trial/Seventh Amendment | NLRB’s bid for make-whole relief is legal in nature and triggers right to jury trial (citing Jarkesy) | Remedies are equitable (restorative) under public rights doctrine; Jones & Laughlin forecloses jury right | Seventh Amendment does not apply to NLRB proceedings; claim fails |
| Separation of powers claim (combination of functions/policymaking) | NLRB adjudicates private rights or sets policy by adjudication, usurping judicial power | Board can make policy via adjudication; longstanding Supreme Court precedent | NLRB’s practice is constitutional; claim not likely to succeed |
Key Cases Cited
- Humphrey's Ex'r v. United States, 295 U.S. 602 (1935) (upholds constitutionality of for-cause removal protections for FTC commissioners as precedent for multi-member boards)
- NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937) (upholds NLRA and public-rights exception to jury trial in NLRB proceedings)
- Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020) (CFPB single-director removal invalid, but distinguishes multi-member agencies)
- Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010) (invalidates dual-layer removal for certain executive officers, but distinguishes ALJs)
- Collins v. Yellen, 594 U.S. 220 (2021) (removal protections require showing of actual harm for retrospective/prospective relief)
- Morrison v. Olson, 487 U.S. 654 (1988) (upholds good-cause removal restrictions for inferior officers)
- SEC v. Jarkesy, 144 S. Ct. 2117 (2024) (Seventh Amendment applies only to certain legal, not equitable, remedies; public-rights doctrine distinguishes NLRB context)
- Atlas Roofing Co. v. Occupational Safety & Health Review Comm’n, 430 U.S. 442 (1977) (Congress can assign resolution of statutory public rights without jury)
- NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) (Board permitted to make policy through adjudication)