United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 4, 2008 Decided May 1, 2009
No. 08-1162
LAUREL BAYE HEALTHCARE OF LAKE LANIER, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 08-1214
On Petition for Review
and Cross-Application for Enforcement
of an Order of the National Labor Relations Board
Charles P. Roberts, III, argued the cause for petitioner.
With him on the briefs was Clifford H. Nelson, Jr.
James B. Coppess argued on the cause for intervenor. With
him on the brief was James D. Fagan, Jr.
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Ruth E. Burdick, Attorney, National Labor Relations Board,
argued the cause for respondent. With her on the brief were
Julie Broido, Supervisory Attorney, and Jacob Frisch, Attorney.
Ronald Meisburg, General Counsel, John E. Higgins, Jr.,
Deputy General Counsel, John H. Ferguson, Associate General
Counsel, and Linda Dreeben, Deputy Associate General Counsel
also entered an appearance.
Before: SENTELLE, Chief Judge, TATEL, Circuit Judge, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Chief Judge SENTELLE.
SENTELLE, Chief Judge: Laurel Baye Healthcare of Lake
Lanier, Inc. petitions for review of an order of the National
Labor Relations Board finding that Laurel Baye engaged in
unlawful labor practices, and imposing a remedy. The Board
cross-petitions for enforcement of the order. Unlike the typical
petition for review of an NLRB order, Laurel Baye does not
advance allegations of error in the Board’s findings,
conclusions, or remedies, but rather challenges the authority of
the Board to enter the order at all, as the Board had only two
members and therefore did not meet the statutory Board quorum
requirement of three members. The Board argues that because
the Board itself had earlier delegated all of its authority to a
three-member panel of which the two remaining Board members
constituted a quorum, that quorum of the delegee panel had the
authority to enter the order. Because we agree with Laurel Baye
that the Board’s purported order was beyond its lawful authority,
we rule that the purported order is without force, deny the
Board’s cross-petition for enforcement, and remand the matter
for further proceedings before the Board at such time as it may
once again consist of sufficient members to constitute a quorum.
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I. BACKGROUND
A. Legal Background
The National Labor Relations Act (NLRA), now codified as
29 U.S.C. §§ 151–169 (2008), originally provided that the
National Labor Relations Board (Board) would consist of three
members. See Act of July 5, 1935, ch. 372, § 3(a), 49 Stat. 449,
451 (amended 1947). As subsequently amended and at all times
relevant to the current proceeding, the NLRA provides that “the
Board shall consist of five instead of three members.” 29 U.S.C.
§ 153(a). Section 3(b) of the NLRA states, in relevant part, that:
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).
This section encompasses four provisions. First, the
delegation provision states that “[t]he Board is authorized to
delegate to any group of three or more members any or all of the
powers which it may itself exercise.” Id. Second, the vacancy
provision provides that “[a] vacancy in the Board shall not
impair the right of the remaining members to exercise all of the
powers of the Board.” Id. Third, the Board quorum provision
states that “three members of the Board shall, at all times,
constitute a quorum of the Board.” Id. Finally, the delegee
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group quorum provision states that “two members shall
constitute a quorum of any [three-member] group [to which the
Board delegated its powers pursuant to the delegation
provision.]” Id.
B. Factual Background
This case arises out of unfair labor practice charges brought
in 2005 by Intervenor, United Food and Commercial Workers
Union Local 1996 (United), and the General Counsel of the
Board against Petitioner Laurel Baye Healthcare of Lake Lanier,
Inc. (Laurel Baye). On July 12, 2006, after a hearing, an
administrative law judge issued a proposed decision and order
concluding that Laurel Baye had committed violations of
sections 8(a)(1) and (a)(5) of the NLRA. Laurel Baye filed with
the Board exceptions to the ALJ’s decision, which the Board
accepted on September 7, 2006.
Between the time that the ALJ issued his decision and the
time that the Board took up review of Laurel Baye’s exceptions
to the decision the previously-five-member Board underwent a
series of dramatic personnel changes. On December 16, 2007,
Board Chairman Robert J. Battista’s term expired, leaving four
members on the Board. On December 20, 2007, the remaining
four members of the Board (Wilma Liebman, Peter Schaumber,
Peter Kirsanow, and Dennis Walsh) unanimously voted to
delegate all of its powers to a three-member group consisting of
Board members Liebman, Schaumber and Kirsanow, effective
December 28, 2007.
The purpose of this delegation of power was simple and
transparent. According to the Board’s minutes on that day, this
action was done in anticipation “that in the near future [the
Board] may for a temporary period have fewer than three
Members,” because the recess appointment terms for Members
5
Walsh and Kirsanow were set to expire on December 31, 2007.
The Board was of the view that “this action will permit the
remaining two Members to issue decisions and orders in unfair
labor practice and representation cases after [the] departure of
Members Kirsanow and Walsh, because the remaining Members
[Liebman and Schaumber] will constitute a quorum of the three-
member group [under section 3(b) of the NLRA].” In addition
to its own interpretation of the statutory text, the Board relied on
the legal analysis set forth in a March 4, 2003 Memorandum
Opinion issued by the Office of Legal Counsel of the U.S.
Department of Justice. In its Memorandum Opinion, OLC
concluded, as did the Board, that “if the Board delegated all of
its powers to a group of three members, that group could
continue to issue decisions and orders as long as a quorum of
two members remained.” Quorum Requirements, 2003 WL
24166831 (Mar. 4, 2003).
On December 31, 2007, the recess appointments of
Members Walsh and Kirsanow expired. Since January 1, 2008,
the Board has functioned with the two remaining members,
Liebman and Schaumber, who acted as a two-member quorum
of the three-member delegee group created by the Board’s
December 20, 2007, action. On February 29, 2008, Members
Liebman and Schaumber issued a Decision and Order adopting
the ALJ’s rulings, findings and conclusions, and adopting the
ALJ’s recommended Order in full (with only inadvertent errors
corrected). This Decision and Order was issued under the two
members’ authority as a two-person quorum of the three-
member group designated by the Board. Kirsanow, by that time
no longer a member of the Board, did not take part in hearing or
resolving this case at all.
Laurel Baye petitions this Court for review of the Board’s
decision. In so doing, “Laurel Baye does not challenge the
merits of the Board’s unfair labor practice findings or its
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remedy.” Rather, Laurel Baye contends that the two members
of the Board lacked the power to issue a Decision and Order in
this case. The Board cross-petitions for enforcement of its
unfair labor practice order.
II. ANALYSIS
This case concerns the interplay of the delegation, vacancy,
and quorum provisions of section 3(b) of the NLRA, and
requires us to determine whether, under these provisions, the
two-member delegee group consisting of Members Liebman and
Schaumber could lawfully issue an order finding that Laurel
Baye engaged in unfair labor practices. Laurel Baye challenges
both the legitimacy and continuing nature of the Board’s
delegation. The Board counters that its actions give effect to
every provision within section 3(b). Specifically, the Board
posits that there is a general quorum requirement of three
members, except where powers have been delegated to a group
of three, in which case the two-member delegee group quorum
provision and the vacancy provision allow the remaining two
members of the Board to continue to act as a delegee group.
Laurel Baye argues for the invalidity of the Board’s action
under two rationales. First, it contends that the Board has no
authority to delegate its power to a three-member group that it
knows will be acting as a two-member group due to expected
term expiration. In Laurel Baye’s view, the Board’s delegation
cannot stand because it is simply a sham. The second
formulation of Laurel Baye’s argument is that even if the Board
could make the initial delegation, that delegation cannot survive
the loss of a quorum on the Board itself. Because we find the
second formulation of the argument convincing, we pretermit
the first.
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“A cardinal principle of interpretation requires us to
construe a statute ‘so that no provision is rendered inoperative
or superfluous, void or insignificant.’” Asiana Airlines v. FAA,
134 F.3d 393, 398 (D.C. Cir. 1998) (quoting C.F. Commc’ns
Corp. v. FCC, 128 F.3d 735, 739 (D.C. Cir. 1997)). The
Board’s interpretation of section 3(b), however, violates this
principle of statutory interpretation by eschewing various
portions of the statutory language. Specifically, the Board’s
position ignores the requirement that the Board quorum
requirement must be satisfied “at all times.” 29 U.S.C. § 153(b)
(emphasis added). Moreover, it ignores the fact that the Board
and delegee group quorum requirements are not mutually
exclusive. The delegee group quorum provision’s language does
not eliminate the requirement that a quorum of the Board is
three members. Rather, it states only that the quorum of any
three-member delegee group shall be two. Id. The use of the
word “except” is therefore present in the statute only to indicate
that the delegee group’s ability to act is measured by a different
numerical value. See id. The Board quorum requirement
therefore must still be satisfied, regardless of whether the
Board’s authority is delegated to a group of its members.
Reading the two quorum provisions harmoniously, the result is
clear: a three-member Board may delegate its powers to a three-
member group, and this delegee group may act with two
members so long as the Board quorum requirement is, “at all
times,” satisfied. Id. But the Board cannot by delegating its
authority circumvent the statutory Board quorum requirement,
because this requirement must always be satisfied.
Indeed, if Congress intended a two-member Board to be
able to act as if it had a quorum, the existing statutory language
would be an unlikely way to express that intention. The quorum
provision clearly requires that a quorum of the Board is, “at all
times,” three members. 29 U.S.C. § 153(b). A modifying
phrase as unambiguous as this denotes that there is no instance
8
in which this Board quorum requirement may be disregarded.
Contrary to the Board’s contentions, Congress did not intend to
use the delegee group quorum provision as an exception to the
requirement that the Board quorum requirement must be met “at
all times.” Though the delegee group quorum provision is
preceded by the prepositional phrase “except that,” id.,
Congress’s use of differing object nouns within the two quorum
provisions indicates clearly that each quorum provision is
independent from the other. The establishment of a two-member
quorum of a subordinate group does not logically require any
change in the provision mandating a three-member quorum for
the Board as a whole. In fact, it does not seem odd at all that a
sub-unit of any body would have a smaller quorum number than
the quorum of the body as a whole. Quorums, after all, are
usually majorities. A majority of three is smaller than a majority
of five. It therefore defies logic as well as the text of the statute
to argue, as the Board does, that a Congress which explicitly
imposed a requirement for a three-member quorum “at all times”
would in the same sentence allow the Board to reduce its
operative quorum to two without further congressional
authorization. Congress provided unequivocally that a quorum
of the Board is three members, and that this requirement must be
met at all times. The delegee group quorum provision does not
eliminate this requirement.
The strained interpretation by the Board is contrary to basic
tenets of agency and corporation law. As the Restatement
(Third) of Agency sets forth, an agent’s delegated authority
terminates when the powers belonging to the entity that
bestowed the authority are suspended. Restatement (Third) of
Agency § 3.07(4) (2006). An agent’s delegated authority is also
deemed to cease upon the resignation or termination of the
delegating authority. 2 William Meade Fletcher, Fletcher
Cyclopedia of the Law of Corporations § 504 (2008); see
Emerson v. Fisher, 246 F. 642, 648 (1st Cir. 1918) (holding that
9
a corporate treasurer’s resignation terminated any authority
delegated by the treasurer to other individuals). Moreover, as
Fletcher notes, a delegating board of directors’s powers are
suspended whenever the board’s membership falls below a
quorum. See 2 Fletcher Cyclopedia of the Law of Corporations
§ 421 (“If there are fewer than the minimum number of directors
required by statute, [the remaining directors] cannot act as a
board.”). In the context of a board-like entity, a delegee’s
authority therefore ceases the moment that vacancies or
disqualifications on the board reduce the board’s membership
below a quorum. It must be remembered that the delegee
committee does not act on its own behalf. The statute confers no
authority on such a body; it only permits its creation. The only
authority by which the committee can act is that of the Board.
If the Board has no authority, it follows that the committee has
none. The delegee’s authority to act on behalf of the Board
therefore ceased the moment the Board’s membership dropped
below its quorum requirement of three members.
We reach this conclusion despite the Board’s contention
that this court has permitted other agencies to continue to
function with fewer than a majority of their membership
positions filled. Specifically, the Board cites to two cases from
this court: Railroad Yardmasters of America v. Harris, 721 F.2d
1332 (D.C. Cir. 1983), and Falcon Trading Group, Ltd. v. SEC,
102 F.3d 579 (D.C. Cir. 1996).
In Yardmasters, we held that the two sitting members of the
National Mediation Board (NMB) could properly delegate the
NMB’s powers to one of the members, despite the fact that one
of the two delegating members resigned later that day, thereby
leaving a single NMB member to conduct the NMB’s business.
Yardmasters, 721 F.2d at 1342-45. The Board argues that our
reasoning in Yardmasters enables the Board to take action to
continue to operate. In Yardmasters, we noted that if the NMB
10
“can use its authority to delegate in order to operate more
efficiently, then a fortiori the Board can use its authority in
order to continue to operate when it otherwise would be
disabled.” Id. at 1340 n.26. Similarly, the Board argues that
allowing the Board to act to preserve its continuity would give
effect to the language and purpose of the NLRA. After all, the
Board contends, the inclusion of the delegation provision was
designed to ensure that the Board was able to operate more
efficiently. Moreover, the NLRA was designed to prevent
“industrial strife.” 29 U.S.C. § 151. As a result, the argument
goes, the NLRB’s reliance on a combination of its delegation,
vacancy, and quorum provisions to ensure that it would continue
to operate despite upcoming vacancies was consistent with the
purpose of the NLRA, and was therefore proper.
We are unmoved. Our reasoning in Yardmasters does not
apply to this case. In that case, we went to great lengths to note
the “narrowness of our holding.” Yardmasters, 721 F.2d at
1344. We expressly noted that our holding governed only
whether the NMB was able to delegate its authority to a single
NMB member. See id. at 1344-45. Further, we stressed that the
holding was not meant to extend to agencies such as the NLRB,
in light of the fact that the NLRB was “principally engaged in
substantive adjudications [concerning] unfair labor practices
[and] enforc[ing] individual rights . . . .” Id. at 1345. We
conclude that Yardmasters’ reasoning is limited to its statutory
context. Therefore, the principle set forth in Yardmasters that
an agency board’s delegation of power is “not affected by
changes in personnel” due to it being “[i]nstitutional” in nature
does not apply here. Id. at 1343. In response to the dissent’s
concerns that the court’s validation of the NMB’s delegation
could lead to abuse of power, the Yardmasters court specifically
stressed the fact that the NMB’s functions were entirely unlike
the functions of the National Labor Relations Board, which
“adjudicate[s] unfair labor practices [and] seek[s] to enforce
11
individual rights under the Act.” Yardmasters, 721 F.2d at
1345. We emphasized that “the [NMB’s] role is perhaps best
illustrated by its critical duty . . . of notifying the President that
a labor dispute threatens ‘substantially to interrupt interstate
commerce to a degree such as to deprive any section of the
country of essential transportation service.’” Id. (quoting 45
U.S.C. § 160 (1976)). Our reliance on this distinction as a basis
for our holding in Yardmasters strongly suggests–if not
expressly states–that Yardmasters’ holding was not intended to
apply in cases involving the adjudication of unfair labor
practices, such as the case before us now.
Likewise, Falcon Trading offers no support to the Board.
In that case, we approved the SEC’s promulgation of a new
quorum rule, which stated that the SEC’s quorum would equal
the number of remaining commissioners if the number of
remaining commissioners fell below the normal three-
commissioner quorum; we also upheld an SEC opinion issued
by a two-member Commission acting pursuant to this quorum
provision. Falcon Trading, 102 F.3d at 582. We held that, “[i]f
not otherwise constrained by statute, an agency sufficiently
empowered by its enabling legislation may create its own
quorum rule.” Id. (emphasis added). We approved the SEC’s
power to determine how many members constituted a quorum
because Congress “specifically bestowed [that power] on the
Commission.” Id. Further, we noted that the SEC’s quorum
determination was lawful because it was “not countermanded
elsewhere by Congress, as for example in an explicit statutory
quorum provision.” Id.
This highlights the fundamental problem with the Board’s
reasoning. The Securities Exchange Commission was
sufficiently empowered by its enabling legislation; the Board is
not. Indeed, Congress has spelled out precise quorum provisions
for the Board. Congress provided that a quorum of the Board is
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three members. The Board does not have three members. It
cannot act. Though section 3(b) gives the Board power to
delegate its authority to a group of members, this authority is
necessarily limited by the fact that the delegation authority
allows the Board to grant its power only to a group of three or
more members. See 29 U.S.C. § 153(b). The Board’s
delegation power is also obviously limited by the fact that the
Board quorum provision establishes that the power of the Board
to act exists when the Board consists of three members. Id. The
delegee group’s delegated power to act, however, ceases when
the Board’s membership dips below the Board quorum of three
members. See supra at pp. 7-9. It therefore follows that where,
as here, a delegee group acts on behalf of the Board, see id., the
Board quorum requirement still must be satisfied.
Further, the Board’s interpretation is not supported by the
text of the vacancy provision. The vacancy provision states only
that “[a] vacancy in the Board shall not impair the right of the
remaining members to exercise all of the powers of the Board.”
29 U.S.C. § 153(b) (emphasis added). One reading of this text
would suggest the Board’s ability to act is impaired if there is
more than one vacancy on the Board. The Board quorum
provision, however, clarifies that “three members of the Board
shall, at all times, constitute a quorum of the Board.” Id. A
quorum is defined as “[t]he minimum number of members (usu.
a majority of all the members) who must be present for a
deliberative assembly to legally transact business.” Black’s Law
Dictionary 1284 (8th ed. 2004). The Board’s ability to legally
transact business exists only when three or more members are on
the Board. Considering the language of the vacancy and Board
quorum provisions in tandem, it is clear that the vacancy
provision allows the Board to function fully with at most two
vacancies. This is the maximum number of vacancies that the
Board can sustain and still maintain a quorum. This is consistent
with the delegation provision’s requirement that the Board may
13
delegate its authority only to groups of three or more members.
29 U.S.C. § 153(b).
After oral argument, the Board called our attention to a new
decision, Northeastern Land Services, Ltd. v. NLRB, No. 08-
1878, 2009 WL 638248 (1st Cir. Mar. 13, 2009). The Board
asserts that the First Circuit decided the same issue as the one
before us and decided it in favor of the Board. We note that the
First Circuit decided the case in terms of the continuing validity
of a three-member delegee group after the expiration of the term
of one member. The determination of that issue is not necessary
to our decision, given that we have determined that the lack of
a quorum on the Board as a whole is the determining factor.
Concededly, the Board prevailed before the First Circuit on facts
parallel to those before us. But the First Circuit did not decide
the same issue. In any event, the First Circuit’s decisions are not
binding precedent upon us. We are bound only by the decisions
of our circuit and the Supreme Court. This is in keeping with
the Supreme Court’s recognition that each court of appeals has
a duty to resolve the rules independently of each other. See
United States v. Mendoza, 464 U.S. 154, 160 (1984) (“Allowing
only one final adjudication would deprive this Court of the
benefit it receives from permitting several courts of appeals to
explore a difficult question before this Court grants certiorari.”
(citing E.I. du Pont de Nemours & Co. v. Train, 430 U.S. 112,
135 n.26 (1977))).
III. CONCLUSION
Finally, we acknowledge that the case before us presents a
close question, and that neither OLC’s interpretation nor the
Board’s desire to continue to function is entirely indefensible.
Both were undoubtedly born of a desire to avoid the
inconvenient result of having the Board’s adjudicatory wheels
grind to a halt. Nevertheless, we may not convolute a statutory
14
scheme to avoid an inconvenient result. Our function as a court
is to interpret the statutory scheme as it exists, not as we wish it
to be. Any change to the statutory structure must come from the
Congress, not the courts. U.S. Const. art. I, § 1. Perhaps a
properly constituted Board, or the Congress itself, may also
minimize the dislocations engendered by our decision by
ratifying or otherwise reinstating the rump panel’s previous
decisions, including the case before us. See, e.g., FEC v. Legi-
Tech, Inc., 75 F.3d 704 (D.C. Cir. 1996) (affirming properly re-
constituted FEC Board’s ratification remedy for its
unconstitutional membership).
In the meantime, however, because we determine that the
Board was not properly constituted and it did not have the
authority to issue the order before us, we grant the petition of
Laurel Baye Healthcare and order that the decision of the NLRB
be vacated, and the case remanded for further proceedings
before the Board at such time as it may once again consist of
sufficient members to constitute a quorum. We also deny the
Board’s cross-petition for enforcement of its invalid order.
So ordered.