Breaking News

Fall-out from today’s decision in New Process Steel

UPDATE:  The NLRB has issued a press release on the decision which gives a hint at what the Board thinks will happen to non-final cases, and its estimate of the number of such cases: “The same question has been raised in five more cases pending before the Supreme Court, and 69 that are pending before the Courts of Appeals. It is expected that those cases will be remanded to the Board, and the now-four member Board will decide the appropriate means for further considering and resolving them.”


This morning’s decision in New Process Steel v. National Labor Relations Board, No. 08-1457, took many observers by surprise.  The Court held that for a two-year period that ended only recently, the Board had been acting without statutory authority in adjudicating nearly six hundred cases because vacancies had left the Board without a quorum.  We will provide further coverage of the decision later, but for the moment, the immediate question that arises is what effect the decision has on those hundreds of decisions.

The question has two parts.  First, how does the decision affect the parties to the prior adjudications?  In the case before it, the Supreme Court simply reversed the decision of the court of appeals (which had upheld the Board’s authority) and remanded for further consideration consistent with its opinion.  In all likelihood, it seems to me, the decision of the Board will be vacated and the Board will have to hold a new adjudication (now that it has a proper quorum).  The same result is likely in other cases that are not yet final (for example, other cases still being challenged in the courts of appeals).

The more difficult question is what happens to the cases that are final.  Res judicata principles would ordinarily preclude reopening a final judgment.  But there may be arguments that the principles do not apply with respect to a final judgment issued by a body lacking jurisdiction to enter the judgment.  Likewise, a party’s prior failure to challenge the Board’s lack of a quorum might ordinarily forfeit the right to raise that objection later (particularly after final judgment), but again one ordinarily cannot waive subject-matter jurisdictional defects (assuming that the defect here is considered equivalent to a court lacking subject-matter jurisdiction, as opposed to some other kind of defect that might be loosely labeled).  And it might be possible that parties to prior final cases could petition the Board itself for reconsideration.

As a practical matter, it may not be worth the time and expense for parties to challenge prior final judgments.  After all, the two-member boards were composed of one Democrat and one Republican who agreed on the result (the two-member board did not issue decisions in cases in which the members could not reach an agreement).  And if the decision was challenged in court, the court will have already found that the decision by the two-member panel was substantively lawful.  Parties will have to gauge the chances of getting a different result from a properly authorized panel or in a subsequent appeal.

The second part of the fallout has to do with the precedential effect of the decisions issued in that two-year period.  Since they were issued unlawfully, one might presume that they will now be deprived of precedential effect.  The Board might avoid this by issuing a blanket order adopting the decisions on behalf of the now properly constituted Board (presuming it has authority to do that).  Or it may be that the questions will simply have to be re-examined as they come up again in future cases (the old decisions perhaps being treated as persuasive, but not binding, authority akin to unpublished decisions or decisions from other jurisdictions).

I must admit that I have not had the time and do not have the expertise to reach any firm conclusions about the implications.  I am sure that others will be giving the question a great deal of thought in the coming days.  But it does seem clear that the Court’s  decision will require a great deal of sorting out and is likely to prompt a fair bit of litigation in the coming months.