NEW PROCESS STEEL, L. P. v. NATIONAL LABOR RELATIONS BOARD
No. 08-1457
Supreme Court of the United States
Argued March 23, 2010—Decided June 17, 2010
560 U.S. 674
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
Sheldon E. Richie argued the cause for petitioner. With him on the briefs were Joseph W. Ambash, Justin F. Keith, Mark E. Solomons, and Laura Metcoff Klaus.
Deputy Solicitor General Katyal argued the cause for respondent. With him on the brief were Solicitor General Kagan, Sarah E. Harrington, Ronald Meisburg, John H.
JUSTICE STEVENS delivered the opinion of the Court.
The Taft-Hartley Act, enacted in 1947, increased the size of the National Labor Relations Board (Board) from three members to five. See
I
As 2007 came to a close, the Board found itself with four members and one vacancy. It anticipated two more vacancies at the end of the year, when the recess appointments of Members Kirsanow and Walsh were set to expire, which would leave the Board with only two members—too few to meet the Board‘s quorum requirement,
The Board‘s minutes explain that it relied on “the statutory language” of
On December 28, 2007, the Board‘s delegation to the three-member group of Members Liebman, Schaumber, and Kirsanow became effective. On December 31, 2007, Member Kirsanow‘s recess appointment expired. Thus, starting on
During the 27-month period in which the Board had only two members, it decided almost 600 cases. See Letter from Elena Kagan, Solicitor General, to William K. Suter, Clerk of Court (Apr. 26, 2010). One of those cases involved petitioner New Process Steel. In September 2008, the two-member Board issued decisions sustaining two unfair labor practice complaints against petitioner. See New Process Steel, LP, 353 N. L. R. B. No. 25; New Process Steel, LP, 353 N. L. R. B. No. 13. Petitioner sought review of both orders in the Court of Appeals for the Seventh Circuit, and challenged the authority of the two-member Board to issue the orders.
The court ruled in favor of the Government. After a review of the text and legislative history of
II
The Board‘s quorum requirements and delegation procedure are set forth in § 3(b) of the NLRA, 49 Stat. 451, as
“The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . . A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.”
29 U. S. C. § 153(b) .
It is undisputed that the first sentence of this provision authorized the Board to delegate its powers to the three-member group effective on December 28, 2007, and the last sentence authorized two members of that group to act as a quorum of the group during the next three days if, for example, the third member had to recuse himself from a particular matter. The question we face is whether those two members could continue to act for the Board as a quorum of the delegee group after December 31, 2007, when the Board‘s membership fell to two and the designated three-member group of “Members Liebman, Schaumber, and Kirsanow” ceased to exist due to the expiration of Member Kirsanow‘s term. Construing
The first sentence of
First, and most fundamentally, reading the delegation clause to require that the Board‘s delegated power be vested continuously in a group of three members is the only way to harmonize and give meaningful effect to all of the provisions in
Interpreting the statute to require the Board‘s powers to be vested at all times in a group of at least three members is consonant with the Board quorum requirement, which requires three participating members “at all times” for the Board to act. The interpretation likewise gives material ef-
The contrary reading, on the other hand, allows two members to act as the Board ad infinitum, which dramatically undercuts the significance of the Board quorum requirement by allowing its permanent circumvention. That reading also makes the three-member requirement in the delegation clause of vanishing significance, because it allows a de facto delegation to a two-member group, as happened in this case. Under the Government‘s approach, it would satisfy the statute for the Board to include a third member in the group for only one minute before her term expires; the approach gives no meaningful effect to the command implicit in both the delegation clause and the Board quorum requirement that the Board‘s full power be vested in no fewer than three members. Hence, while the Government‘s reading of the delegation clause is textually permissible in a narrow sense, it is structurally implausible, as it would render two of
Second, and relatedly, if Congress had intended to authorize two members alone to act for the Board on an ongoing basis, it could have said so in straightforward language. Congress instead imposed the requirement that the Board delegate authority to no fewer than three members, and that it have three participating members to constitute a quorum. Those provisions are at best an unlikely way of conveying congressional approval of a two-member Board. Indeed,
The Government has not adduced any convincing evidence on this front, and to the contrary, our interpretation is consistent with the longstanding practice of the Board. This is the third factor driving our decision. Although the Board has throughout its history allowed two members of a three-member group to issue decisions when one member of a group was disqualified from a case, see Brief for Respondent 20; Board Minutes 6a, the Board has not (until recently) allowed two members to act as a quorum of a defunct three-member group.2 Instead, the Board concedes that its practice was to reconstitute a delegee group when one group member‘s term expired. Brief for Respondent 39, n. 27.3
That our interpretation of the delegation provision is consistent with the Board‘s longstanding practice is persuasive evidence that it is the correct one, notwithstanding the Board‘s more recent view. See Bowen v. Georgetown Univ. Hospital, 488 U. S. 204, 214 (1988).
In sum, a straightforward understanding of the text, which requires that no fewer than three members be vested with the Board‘s full authority, coupled with the Board‘s longstanding practice, points us toward an interpretation of the delegation clause that requires a delegee group to maintain a membership of three.
III
Against these points, the Government makes several arguments that we find unconvincing. It first argues that
Although the group quorum provision clearly authorizes two members to act as a quorum of a “group designated pursuant to the first sentence“—i. e., a group of at least three members—it does not, by its plain terms, authorize two members to constitute a valid delegee group. A quorum is the number of members of a larger body that must partici-
The Government argues that the vacancy clause establishes that a vacancy in the group has no effect. But the clause speaks to the effect of a vacancy in the Board on the authority to exercise the powers of the Board; it does not provide a delegee group authority to act when there is a vacancy in the group. It is true that any vacancy in the group is necessarily also a vacancy in the Board (although the converse is not true), and that a group exercises the (delegated) “powers of the Board.” But
Some courts have nonetheless interpreted the quorum and vacancy provisions of
Finally, we are not persuaded by the Government‘s argument that we should read the statute to authorize the Board to act with only two members in order to advance the congressional objective of Board efficiency. Brief for Respond-
Furthermore, if Congress had intended to allow for a two-member Board, it is hard to imagine why it would have limited the Board‘s power to delegate its authority by requiring a delegee group of at least three members. Nor do we have any reason to surmise that Congress’ overriding objective in amending
IV
In sum, we find that the Board quorum requirement and the three-member delegation clause should not be read as easily surmounted technical obstacles of little to no import.
We are not insensitive to the Board‘s understandable desire to keep its doors open despite vacancies.7 Nor are we unaware of the costs that delay imposes on the litigants. If Congress wishes to allow the Board to decide cases with only two members, it can easily do so. But until it does, Congress’ decision to require that the Board‘s full power be delegated to no fewer than three members, and to provide for a Board quorum of three, must be given practical effect rather than swept aside in the face of admittedly difficult circumstances. Section 3(b), as it currently exists, does not authorize the Board to create a tail that would not only wag the dog, but would continue to wag after the dog died.
The judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
As of the day this case was argued before the Court, the National Labor Relations Board (Board), constituted as a five-member board, had operated with but two members for more than 26 months. That state of affairs, to say the least, was not ideal. This may be an underlying reason for the Court‘s conclusion. Despite the fact that the statute‘s plain terms permit a two-member quorum of a properly designated three-member group to issue orders, the Court holds that the two-member quorum lost all authority to act once the third member left the Board. Under the Court‘s holding, the Board was unauthorized to resolve the more than 500 cases it addressed during those 26 months in the course of carrying out its responsibility “to remove obstructions to the free flow of commerce” through “the promotion of industrial peace.” NLRB v. Fansteel Metallurgical Corp., 306 U. S. 240, 257 (1939). This result is removed even further from the ideal and from congressional intent, as revealed in the statutory design. So it is hard to make the case that the Court‘s interpretation of the statute either furthers its most evident purposes or leads to the more sensible outcome.
Indeed, in my view, the objectives of the statute, which must be to ensure orderly operations when the Board is not at full strength as well as efficient operations when it is, are better respected by a statutory interpretation that dictates a result opposite to the one reached by the Court. And in all events, the outcome of the case is but a check on the accuracy of the textual analysis; and here the text of the statute, which must control, does not support the holding of the Court. These reasons, and those to be further discussed, inform this respectful dissent.
I
The Board, by statute, consists of five members.
“The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise.”
Then, a vacancy clause:
“A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board. . . .”
And finally, immediately following the vacancy clause, are the Board and group quorum provisions:
“[A]nd three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.”
As the Court acknowledges, ante, at 679, the three-member group of Members Liebman, Schaumber, and Kirsanow were a “group designated pursuant to the first sentence” of
Nothing in the statute suggests that a delegation to a three-member group expires when one member‘s seat becomes vacant, as the Court holds today. In other contexts, it is settled law that a vacancy in a delegee group does not
By its holding, the Court rejects a straightforward reading that it acknowledges is “textually permissible.” Ante, at 681. It does so because, in its view, it is “structurally implausible.” Ibid. But the only textually permissible reading of
II
The Court reads the statute to require a delegee group to maintain three members. Unable to find this requirement in the statute‘s text, the Court gives three reasons for its interpretation. Those reasons do not withstand scrutiny.
A
The first reason the Court gives for its interpretation is that reading the statute to require a delegee group to maintain three members “is the only way to harmonize and give meaningful effect to all of the provisions in”
The Government‘s reading of the statute does not render any clause meaningless. The full Board must have three or more members in order to conduct any business, including delegating its authority to a three-member group, as required under the Board quorum provision. This provision applies “at all times” to the Board acting as a whole. Two members of the Board could not conduct any business unless they were previously designated by the full Board as members of a delegee group with such authority. Any delegation of the Board‘s authority must be to at least three members, as required by the delegation clause. Any group to which the Board has properly delegated its authority must have two members present to act, as required by the group quorum provision. This reading gives the delegation clause and each of the quorum provisions independent meaning.
Where two members act as a quorum of a group, the statute (unlike the Court) is indifferent to the reason for the third member‘s absence, be it illness, recusal, or vacancy. The Court would hold that two members of a group can act as a quorum so long as the third‘s absence is not due to a vacancy; yet the vacancy clause makes it clear that the authority of Board “members” to act shall not be impaired by vacancies. The clause includes all members, including those acting as part of three-member groups.
The Court in effect would rewrite the group quorum provision to say, “two members shall constitute a quorum of any group [unless the third member‘s absence is due to a vacancy].” Even if the statute said nothing about vacancies, this would be a misreading of the quorum provision. A “quorum” is the “minimum number of members . . . who must be present for a deliberative assembly to legally transact business.” Black‘s Law Dictionary 1370 (9th ed. 2009) (hereinafter Black‘s). As the Court has made clear in the
For instance, the Court has previously discussed a statute governing the delegation of power to three-member panels of the federal courts of appeals. Ibid. That statute provides: “A majority of the number of judges authorized to constitute a court or panel thereof . . . shall constitute a quorum.”
If the group quorum provision leaves any room for doubt that it applies in cases of vacancy, its application is made clearer by the vacancy clause itself. That clause states in unequivocal terms that “[a] vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board.”
The Court counters that the vacancy clause “speaks to the effect of a vacancy in the Board on the authority to exercise
In an effort to avoid the mandates of the group quorum provision, as buttressed by the vacancy clause, the Court relies on the delegation clause. The Court reads the clause as requiring a delegee group to maintain three members in order for its authority to remain intact. In my respectful submission, this reading of the statute, in which any vacancy in a delegee group somehow invalidates the delegation itself, has no textual basis. Contrary to the Court‘s and petitioner‘s assertions, the delegation clause is not rendered unimportant under the Government‘s interpretation. The delegation clause establishes what is required for delegation in the first instance, while the vacancy clause and the group quorum provision allow the delegee group to proceed in the event that a member‘s term expires or a member resigns.
Congress could have required a delegee group to maintain three members, but it did not do so; instead, it included a vacancy clause that is an explicit rejection of such a requirement. That is no doubt why the Court‘s reading has not been adopted by the five Courts of Appeals to have rejected its result. See Teamsters Local Union No. 523 v. NLRB,
The Court‘s reasons for nonetheless reading this requirement into the statutory text bring me to its second point.
B
The Court‘s textual arguments in the end reduce to a single objection: The Government‘s reading of
The Court‘s complaint, then, cannot be that Congress did not intend two members to exercise the powers of the Board; it must be that Congress did not intend to allow two mem-
“Those decisions resolved a wide variety of disputes over union representation and allegations of unfair labor practices, including cases involving employers’ discharges of employees for exercising their statutory rights; disputes over secret ballot elections in which employees voted to select a union representative; protests over employers’ withdrawal of recognition from union representatives designated by employees; refusals by employers or unions to honor their obligation to bargain in good faith; and challenges to the requirement that employees pay union dues as a condition of employment.” Brief for Respondent 6-7 (footnotes omitted).
The Court‘s objection, that Congress could have been more explicit if it wanted two members to operate as the Board, is misplaced. There is nothing inconsistent about Congress preferring Board decisions to be made by three members and advancing that preference through statutory requirements, while at the same time providing exceptions for suboptimal circumstances, such as those presented here. Quorum provisions do not express the legislature‘s judgment about the optimal number of members that should be present to transact business; they set a floor that, while less than ideal, provides a minimum number of participants necessary to protect
One likely reason Congress did not permit the Board to delegate its authority to two-member groups in the first instance is that Congress wanted to avoid two-member groups in the mine run of cases. Congress’ statutory scheme achieved that goal, as the Court‘s review of the Board‘s historical practices aptly demonstrates. Ante, at 681-683. Congress nonetheless provided for two-member quorums to operate in extraordinary circumstances, where the Board has exercised its discretion to delegate its authority to a particular three-member group, and one member of such a group is unavailable for whatever reason. The Board‘s delegation to a three-member group that ultimately dwindled to two was a thoughtful and considerate exercise of its reasonable discretion when it was confronted with two imperfect alternatives.
During the past two years, events have turned what Congress had undoubtedly thought would be an extraordinary circumstance into an ordinary one, through no fault of the Board. That is no reason to dispense with the statutory regime that is prescribed when these circumstances arise, even when they unexpectedly persist.
C
The Court‘s final reason for its interpretation is the Board‘s longstanding practice of reconstituting panels whenever they drop below three members due to a vacancy. But see Photo-Sonics, Inc. v. NLRB, 678 F. 2d 121, 122-123 (CA9 1982) (upholding decision from a two-member delegee group after third member retired). The commonsense conclusion from this practice, however, is that the Board respects the superiority of three-member groups to two-member quorums of those groups. That the Board reconstitutes its panels to include three members does not demonstrate that a
The Court is mistaken, then, when it suggests that, if two-member quorums were permissible, the Board would have a practice of allowing two-member quorums to persist without reconstituting panels. Persuasive authority shows the contrary to be true. In 2003, the Office of Legal Counsel (OLC) advised that two members can operate as a quorum of a properly designated group, even if the other seats on the Board are vacant. The Board agreed to be bound by that opinion. See Dept. of Justice, OLC, Quorum Requirements, App. to Brief for Respondent 1a-3a. Six months later, Board Member Acosta resigned. See NLRB Bulletin, Ronald Meisburg Receives Recess Appointment From President Bush To Be NLRB Member (Dec. 29, 2003). Despite OLC‘s opinion and the Board‘s position that two-member quorums could exercise the full powers of the Board, the Board prudently reconstituted each three-member panel on which Member Acosta served before his departure because there were enough members of the Board to do so. Its own prudent actions should not be used as a reason to strip the Board of a statutory power.
And a further instructive history comes from the practices of the original Board, before the 1947 Taft-Hartley Act. The Wagner Act of 1935, 49 Stat. 451, provided for a three-member Board and contained a vacancy provision similar to the one found in
Congress intended to preserve this practice when it enacted the Taft-Hartley Act in 1947. The purpose of the Taft-Hartley amendment was to increase the Board‘s efficiency by permitting multiple three-member groups to exercise the full powers of the Board. See S. Rep. No. 105, 80th Cong., 1st Sess., 8 (1947) (“The expansion of the Board . . . would permit it to operate in panels of three, thereby increasing by 100 percent its ability to dispose of cases expeditiously“). In furtherance of that objective, the new statutory language in
D
Petitioner, but not the Court, advances an alternative interpretation of
This is a misreading of the statute that the Court rightly declines to adopt. Ante, at 684, n. 4. As explained above, that the Board must meet a three-member quorum requirement at all times when it wishes to operate as the full Board does not mean it must maintain three members in order for delegee groups to act. It just means that the quorum requirement for the full Board, operating independently of
Petitioner‘s reading ignores the operation of the word “except” in the statute: “[T]hree members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group.”
While the Court does not adopt petitioner‘s flawed reading, it should be noted that its failure to decisively reject it calls into question various delegations of authority the Board has made beyond three-member groups. For instance,
It is not optimal for a two-member quorum to exercise the full powers of the Board for an extended period of time. But the desire to avoid that situation cannot justify the Court‘s significant revisions to
The Court‘s revisions leave the Board defunct for extended periods of time, a result that Congress surely did not intend. The Court‘s assurance that its interpretation is designed to give practical effect to the statute should bring it to the opposite result from the one it reaches. For these reasons, I would affirm the judgment of the Court of Appeals.