A federal appeals court on Friday invalidated President Barack Obama's "recess" appointments to a labor board last year, ruling that the move was unconstitutional and dealing a blow to Obama's strategy of bypassing Senate Republicans.
The three appointments to the National Labor Relations Board in January 2012 were made while the Senate was out of town but potentially available to act on them.
"Considering the text, history, and structure of the Constitution, these appointments were invalid from their inception," the panel said.
Obama also used such a "recess" appointment last January to install Richard Cordray as head of the Consumer Financial Protection Bureau, although his appointment was not part of the lawsuit.
The suit started as a routine dispute between soda bottling company Noel Canning and the labor board, but lawyers for Senate Republicans seized on the suit as a chance to challenge the appointments.
The case was seen as a test of the limits of the president's ability to make appointments during a Senate recess, a power that bypasses the Senate's usual ability to block nominees and that dates to the U.S. Constitution of 1787.
At the time, the Senate was not officially in recess, meeting every few days for minutes at a time but accomplishing no work and with few senators present. Meanwhile, Obama's nominees remained on the Senate's calendar, blocked by Republicans from up or down votes on their confirmation.
Nancy Cleeland, a spokeswoman for the NLRB, had no immediate comment.
Cordray's appointment was challenged in a separate lawsuit brought in June by the State National Bank of Big Spring, Texas, and other institutions. That suit presented a similar argument that the recess appointment was invalid because the Senate was technically in session.
Cordray's appointment followed months of rancorous debate over the new consumer bureau, which was created by the 2010 Dodd-Frank financial oversight law to police markets for products such as credit cards and home loans.
Once rare, recess appointments became more common in the late 1970s as a way to bypass the confirmation process, which senators have used increasingly to block nominees of both Republican and Democratic presidents.
Recent presidents pushed the boundaries. George W. Bush took the rare step of filling a judgeship during a recess, while Obama appointed the NLRB members while the Senate was holding "skeleton" sessions set up to keep it from going into recess.