UC Health v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 18, 2015 Decided September 18, 2015

No. 14-1049

UC HEALTH,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with 14-1193

On Petition for Review and Cross-Application

for Enforcement of an Order

of the National Labor Relations Board

Kerry P. Hastings argued the cause and filed the briefs

for petitioner.

Kellie Isbell, Attorney, National Labor Relations Board,

argued the cause for respondent. With her on the brief were

Richard Griffin, Jr., General Counsel, John H. Ferguson,

Associate General Counsel, Linda Dreeben, Deputy Associate

General Counsel, and Ruth E. Burdick, Supervisory Attorney.

2

Before: GRIFFITH, Circuit Judge, and EDWARDS and

SILBERMAN, Senior Circuit Judges.

Opinion for the Court filed by Circuit Judge GRIFFITH.

Concurring opinion filed by Senior Circuit Judge

EDWARDS.

Dissenting opinion filed by Senior Circuit Judge

SILBERMAN.

GRIFFITH, Circuit Judge:

In NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), the

Supreme Court determined that the National Labor Relations

Board lacked authority to act during the time that three of its

five members held office via appointments that violated the

Recess Appointments Clause. This petition for review asks

whether a Regional Director of the Board had authority to

conduct a union election and certify its result during that same

time. We conclude that the Regional Director maintained his

authority and therefore deny the petition for review.

I

A

Section 3(a) of the National Labor Relations Act (NLRA)

calls for a National Labor Relations Board made up of five

members who are appointed by the President with the advice

and consent of the Senate. 29 U.S.C. § 153(a). The Board has

two main functions under the NLRA. Its quasi-judicial

function involves deciding whether particular conduct violates

the provisions of the Act that bar unfair labor practices. Id.

§§ 158, 160. The Board also has the primary responsibility for

3

directing and holding representation elections by which

employees may choose to designate representatives for

purposes of collective bargaining. Id. § 159(b), (c).

Representation proceedings differ from unfair labor practice

proceedings in that they may only be reviewed in a court of

appeals when they are relevant to the court’s review of an

unfair labor practice proceeding. See Am. Fed’n of Labor v.

NLRB, 308 U.S. 401, 409 (1940). The Act authorizes the

Board to delegate to Regional Directors the authority to direct

representation elections and certify the results. 29

U.S.C. § 153(b). The Board first delegated its authority over

representation proceedings to the Regional Directors in 1961.

See 26 Fed. Reg. 3911 (May 4, 1961). Regional Directors

have been responsible for administering and certifying the

results of representation elections in their particular regions

ever since.

In what turns out to be a critical distinction for the

purposes of this challenge, the statute preserves for the Board

the power to review “any action of a regional director” taken

pursuant to that delegation, should a party object. 29 U.S.C.

§ 153(b). Thus, though the Board may empower Regional

Directors to oversee representation elections, the terms of the

delegation authorized under the Act provide that no Regional

Director’s actions are ever final on their own; they only

become final if the parties decide not to seek Board review or

if the Board leaves those actions undisturbed. Id.

The Act separately permits the Board to delegate “any or

all of the powers which it may itself exercise” to panels made

up of three or more of its members. 29 U.S.C. § 153(b). When

such a panel is created, the Act provides that two of its

members make up a quorum of that group. Id. This provision

allows the Board to process cases more quickly by spreading

them across more panels. Moreover, it allows the Board to

4

continue to function without requiring the attendance of all

members. Should two of the five members’ terms expire, the

Board can continue to act despite the vacancies, while waiting

for Congress to appoint new members. Nevertheless, the

statute mandates that “three members of the Board shall, at all

times, constitute a quorum of the Board.” Id.

Between August 2010 and January 3, 2012, three of the

Board’s five members’ terms expired and the Senate refused

to confirm any of the President’s nominees to fill the

vacancies, leaving the Board without a quorum and therefore

unable to act. Claiming authority under the Recess

Appointments Clause, see U.S. Const. art. II, § 2, cl. 3, the

President named three individuals to the Board during a

three-day break between pro forma Senate sessions, but the

Supreme Court held those appointments unconstitutional in

Noel Canning, 134 S. Ct. 2550. No Senate-confirmed

appointees were sworn in until August 5, 2013. In the interim,

Regional Directors continued to hold elections and certify the

results, relying upon the Board’s previous delegation of

authority.

B

UC Health is a nonprofit corporation that operates a

hospital and provides inpatient and outpatient medical care

near the University of Cincinnati in Ohio. In March 2013,

while the Board lacked a quorum, the UC Health Public

Safety Union filed a petition with the Board seeking to

represent a unit of security officers employed by the

company. UC Health and the Union entered into a Stipulated

Election Agreement that identified the appropriate bargaining

unit and established that the Regional Director would

supervise a secret-ballot election following the Board’s

regulations. Under those regulations, if either party files

5

timely objections to the election, it is entitled to plenary

review by the Board of any decision of the Regional Director

addressing those objections. 29 C.F.R. § 102.67(c). If no

objections are filed, the Regional Director “shall” certify the

results. Id. § 102.69(b).

The Regional Director held the representation election on

April 16, 2013, and the Union prevailed by a small margin.

The Regional Director certified the results without objection

from UC Health or the Union on April 24. Shortly thereafter,

the Union requested that UC Health bargain, but the company

refused. Citing that refusal to bargain, the Acting General

Counsel charged UC Health with an unfair labor practice. The

company defended itself on the ground that the Regional

Director had acted without authority because the Board lacked

a quorum at the time of the election.

The Board granted summary judgment to the Acting

General Counsel, finding that the company’s argument was

untimely because it had not been made during the

representation proceedings. See UC Health and UC Health

Public Safety Union, 360 N.L.R.B. No. 71 (2014). And even

if not waived, the Board concluded that UC Health’s

argument was without merit because the Board had delegated

authority over representational proceedings to the Regional

Directors in 1961; “[p]ursuant to this delegation, NLRB

Regional Directors remain vested with the authority to

conduct elections and certify their results, regardless of the

Board’s composition at any given moment.” Id. at *1 n.2.

Therefore, the Board determined that the election was valid

and UC Health had committed an unfair labor practice by

refusing to bargain with the Union. Id. at *2-3. UC Health

filed a petition for review in this court. We have jurisdiction

under 29 U.S.C. § 160(e), (f). Absent plain meaning to the

contrary, a court is obliged to defer to an agency’s reasonable

6

interpretation of its statutory jurisdiction pursuant to the

familiar Chevron doctrine. City of Arlington v. FCC, 133 S.

Ct. 1863, 1870-71 (2013).

II

The sole question before us is whether the Regional

Director had authority to hold the representation election and

certify its results when the Board lacked a quorum. We hold

that he did.

A

The Board argues that we need not address whether the

Regional Director had the necessary authority because UC

Health has waived its challenge by failing to raise its

objection to the Regional Director’s authority at the

representation proceeding. “[A]s a general proposition, the

applicable case law emphasizes the need for parties seeking

judicial review of agency action to raise their issues before the

agency during the administrative process in order to preserve

those issues for review.” Advocates for Highway & Auto

Safety v. Fed. Motor Carrier Safety Admin., 429 F.3d 1136,

1148 (D.C. Cir. 2005). The NLRA states that “[n]o objection

that has not been urged before the Board, its member, agent,

or agency, shall be considered by the court, unless the failure

or neglect to urge such objection shall be excused because of

extraordinary circumstances.” 29 U.S.C. § 160(e). And under

the Board’s practice, “any issues that may be presented during

the representation proceeding must be offered there.” Pace

Univ. v. NLRB, 514 F.3d 19, 23 (D.C. Cir. 2008). Thus, the

Board claims, UC Health’s objection to the Regional

Director’s authority comes too late.

7

We have consistently held, however, that challenges to the

composition of an agency can be raised on review even when

they are not raised before the agency. See Noel Canning v.

NLRB, 705 F.3d 490, 497 (D.C. Cir. 2013), aff’d on other

grounds, 134 S. Ct. 2550 (2014); Mitchell v. Christopher, 996

F.2d 375, 378-79 (D.C. Cir. 1993) (recognizing an exception

allowing parties to “raise[] for the first time on

review . . . challenges that concern the very composition or

‘constitution’ of an agency”). Since this challenge directly

involves the question of whether the Board’s lack of a quorum

stripped the Regional Directors of power, UC Health may

make it and we may review it.

The Board also asserts that UC Health may not challenge

the Regional Director’s authority because the company

voluntarily entered into the Stipulated Election Agreement

with the Union, and therefore agreed to let the Regional

Director supervise the election. According to the Board, the

agreement is a contract binding on both parties: UC Health

accepted the Regional Director’s authority to oversee the

election and, in exchange, received important procedural

benefits, including a prompt election. Because UC Health

explicitly agreed to the terms of the election, the Board insists

that the company cannot challenge one of those terms now.

We reject this argument. UC Health did not expressly give up

the challenge it brings now when it executed the Agreement;

it merely signed a form agreement providing that the Board’s

regulations would govern the election. Indeed, when UC

Health entered the Stipulated Election Agreement, no one

knew whether Congress might confirm the President’s

appointments and obviate the quorum issue by the time the

representation election in this case took place. And for that

matter, UC Health could not have known with any certainty

that the Board had no quorum even without Senate approval

for the President’s appointments until the Supreme Court

8

handed down its decision in Noel Canning fourteen months

after the election. We will not hold UC Health responsible for

failing to see the future. And as we have already said,

“challenges that concern the very composition or

‘constitution’ of an agency” can “be raised for the first time

on review,” even if the objecting party failed to make that

objection at the appropriate time below. Mitchell, 996 F.2d at

378-79. Perhaps some objections to agency action could be

abandoned by explicit acceptance of the agency’s authority to

act under the statute. But we need not decide that here

because UC Health did not expressly abandon anything at all

in the Stipulated Election Agreement, and we will not hold it

responsible for failing to preserve expressly an argument the

substance of which had not yet arisen. See San Miguel Hosp.

Corp. v. NLRB, 697 F.3d 1181, 1187 n.7 (D.C. Cir. 2012).

B

UC Health’s challenge to the Board’s decision that the

Regional Director had authority to conduct the election fails

on the merits.

1

The Board interprets the relevant provision of the NLRA

to permit Regional Directors to continue exercising their

delegated authority while the Board lacks a quorum. We

consider the validity of the Board’s interpretation of the Act

under “the familiar two-step Chevron test.” 1 Int’l Alliance of

1

The dissent contends that Chevron is inapplicable in this case

because the Board opinion never relied on Chevron nor stated

explicitly that the statute is ambiguous. Dissent at 5-6. But our

precedent does not require such statements. In Arizona v.

9

Theatrical & Stage Emps. v. NLRB, 334 F.3d 27, 31 (D.C.

Cir. 2003). At step one we ask “whether Congress has directly

spoken to the precise question at issue.” Chevron, U.S.A., Inc.

v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984).

If Congress has addressed whether Regional Directors may

continue to act in the absence of a Board quorum, “that is the

end of the matter[,] for the court, as well as the agency, must

give effect to the unambiguously expressed intent of

Congress.” Id. at 842-43. If the statute is ambiguous, we move

to Chevron’s second step and ask whether the Board’s

interpretation is “a permissible construction of the statute” to

which we must defer. Id. at 843.

Thompson, 281 F.3d 248 (D.C. Cir. 2002), and other cases the

dissent cites, we refused to defer to an agency when the agency

itself made clear that it believed the interpretation on which it relied

was compelled by Congress and did not represent its own view of

an ambiguous statute. See id. at 254. Here, although the Board’s

explanation of its interpretation of the statute is brief, it contains

nothing suggesting that it viewed its interpretation as reflecting

Congress’s unambiguously expressed intent. Instead, the Board’s

reasoning rested on its interpretation of the extent of its prior

delegation of authority to the Regional Director, backed by its

reading of New Process Steel, L.P. v. NLRB, 560 U.S. 674 (2010),

and other case law. Of course, “[l]ike other administrative agencies,

the NLRB is entitled to judicial deference when it interprets an

ambiguous provision of a statute that it administers.” ITT Indus.,

Inc. v. NLRB, 251 F.3d 995, 999 (D.C. Cir. 2001) (internal

quotation marks and citations omitted). And we note that even if we

agreed with the dissent that the Board did not exercise its own

judgment here, we would not in any case rule for UC Health;

because we conclude that the statute is ambiguous, “[t]he law of

this circuit [would] require[] . . . that we withhold Chevron

deference and remand to the agency so that it can fill in the gap.”

PDK Labs., Inc. v. DEA, 362 F.3d 786, 798 (D.C. Cir. 2004).

10

At the first step of Chevron, we conclude that the statute is

silent on the issue of the Regional Director’s power to act

when the Board lacks a quorum. The relevant text of the

statute provides:

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. The Board is also authorized to delegate to

its regional directors its powers . . . to direct an election or

take a secret ballot . . . and certify the results thereof,

except that upon the filing of a request therefor with the

Board by any interested person, the Board may review any

action of a regional director delegated to him under this

paragraph, but such a review shall not, unless specifically

ordered by the Board, operate as a stay of any action taken

by the regional director. 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

....

29 U.S.C. § 153(b). In its adjudication of the unfair labor

practice charge against UC Health, the Board explained that it

interpreted the NLRA to permit the delegation of authority to

the Regional Director and concluded that “[p]ursuant to this

delegation, NLRB Regional Directors remain vested with the

authority to conduct elections and certify their results,

regardless of the Board’s composition at any given moment.”

UC Health, 360 N.L.R.B. No. 71 at *1 n.2.

UC Health argues that the structure of the statute forbids

this interpretation. In its view, the three-member quorum

requirement applies to the activities of not just the Board but

also of the Regional Directors. UC Health points out that the

statute implements the quorum requirement in the sentence

11

immediately succeeding the sentence that authorizes the

Board to delegate authority to the Regional Directors. This

ordering, UC Health argues, expressly limits actors wielding

delegated Board authority precisely as the Board itself is

limited: Neither may act unless the Board has a quorum.

We are not convinced that the statutory text and structure

unambiguously require this interpretation. The plain language

of the Act applies the quorum requirement to the Board’s

authority to act, not the Regional Directors’ ability to wield

delegated authority. To the contrary, the structure of the

statute supports the Board’s interpretation just as well as it

might support UC Health’s construction. The first sentence of

the provision empowers the Board to delegate its final,

plenary authority to panels of its own members. The second

sentence authorizes the Board to delegate to the Regional

Directors the authority to oversee elections, provided that the

Regional Directors’ decisions always remain subject to Board

review if the parties dispute them. And the third sentence

specifies that the Board can only exercise its plenary, final

authority—whether to adjudicate unfair labor practice charges

or to review the decisions of Regional Directors in

representation elections, whether wielded by the Board as a

whole or by three-member delegee panels—if the Board has

at least three validly appointed members. Thus, though the

statute cabins the Board’s own ability to function without a

quorum, it says nothing about what effect the loss of a

quorum has on pre-existing delegations of authority to the

Regional Directors.

2

Because the statute is ambiguous on this point, we owe

deference to the Board’s interpretation, City of Arlington, 133

S. Ct. at 1870-71, if it is reasonable and consistent with the

12

statute’s purpose, see Indep. Ins. Agents of Am., Inc. v.

Hawke, 211 F.3d 638, 643 (D.C. Cir. 2000).

We think the Board’s interpretation easily meets this

requirement. The Board explained that the NLRA “expressly

authorize[s] the delegation” of power to the Regional

Director, that the Board acted under that authority and

“delegated decisional authority in representation cases to

Regional Directors,” and that “[p]ursuant to this delegation,

NLRB Regional Directors remain vested with the authority to

conduct elections and certify their results, regardless of the

Board’s composition at any given moment.” UC Health, 360

N.L.R.B. No. 71 at *1 n.2. This is a sensible interpretation

that is in no way contrary to the text, structure, or purpose of

the statute. Though the dissent suggests we have failed to

examine the language or structure of the statute, Dissent at 5,

we have already explained in our step-one analysis that the

Board’s interpretation gives effect to each part of the statutory

provision. Moreover, allowing the Regional Director to

continue to operate regardless of the Board’s quorum is fully

in line with the policy behind Congress’s decision to allow for

the delegation in the first place. Congress explained that the

amendment to the NLRA that permitted the Board to delegate

authority to the Regional Directors was “designed to expedite

final disposition of cases by the Board.” See 105 Cong. Rec.

19,770 (1959) (statement of Sen. Barry Goldwater).

Permitting Regional Directors to continue overseeing

elections and certifying the results while waiting for new

Board members to be confirmed allows representation

elections to proceed and tees up potential objections for the

Board, which can then exercise the power the NLRA

preserves for it to review the Regional Director’s decisions

once a quorum is restored. And at least those unions and

companies that have no objections to the conduct or result of

an election can agree to accept its outcome without any Board

13

intervention at all. The Board’s interpretation thus avoids

unnecessarily halting representation elections any time a

quorum lapses due to gridlock elsewhere.

The Board’s interpretation of the statute reads every

clause of the statutory provision harmoniously, and, as a

policy matter, it ensures adequate protection for the rights of

employers and unions alike. It is eminently reasonable.

Therefore we defer to the Board’s interpretation under

Chevron step two and uphold the Regional Director’s

authority to direct and certify the union election even while

the Board itself had no quorum.

3

UC Health argues, however, that the Board’s

interpretation of the statute is foreclosed by our decision in

Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, 564

F.3d 469 (D.C. Cir. 2009). We conclude that UC Health is

wrong. Laurel Baye has no direct application here because it

addressed different statutory questions involving different and

highly distinguishable statutory language and altogether

different facts. Neither the holding nor the reasoning of that

case forbids the Board’s interpretation of its authority here, to

which we owe deference.

Laurel Baye addressed the lawfulness of the Board’s

effort to evade the quorum requirement imposed on its own

activities, not the status of authority previously delegated to

the Regional Directors once the Board loses a quorum. In

Laurel Baye, we considered the consequence of events

beginning in December 2007, when the Board had four

members, two of whom had terms that expired at the end of

the month. With their departures, the Board would no longer

satisfy the three-member quorum requirement the NLRA

14

imposes “at all times,” see 29 U.S.C. § 153(b). In an effort to

overcome this impediment, the four-member Board delegated

its plenary, final authority to a panel of three members made

up of the two members whose terms continued into 2008 and

one of the members whose term would soon expire. When the

outgoing members finished their service at the end of 2007,

the Board had a total of only two members and no longer met

the overall three-member quorum requirement. By the same

token, the panel to which the Board had delegated its

authority was composed only of the two remaining members

of the Board. The Board reasoned that because the NLRA

imposes a separate, lower quorum requirement for

three-member panels, those two remaining members made up

a quorum of the delegee panel. Thus, even though the Board

itself was paralyzed for want of a quorum, the Board believed

that those two remaining members could still act in the name

of the three-member panel to which they belonged and could

wield the plenary, final authority the Board had delegated to

that panel before the Board’s total membership fell below the

“at all times” three-member quorum requirement of 29 U.S.C.

§ 153(b).

In Laurel Baye, we rejected this tactic, concluding that

the plain language of the statute had a single, “unambiguous”

reading that foreclosed the Board’s interpretation. 2 564 F.3d

2

Though we did not indicate in so many words that this

conclusion constituted a Chevron step-one holding, we did without

question identify an “unambiguous” reading of the statute regarding

the Board’s authority to evade the quorum requirement on its own

activities that foreclosed any inconsistent Board interpretations.

Laurel Baye, 564 F.3d at 473; see also id. (explaining that the

statutory text “clearly require[d]” one result); id. (“Congress

provided unequivocally” that the Board’s interpretation was

15

at 473. We held that the Board could never adjudicate unfair

labor practice charges with fewer than three active members

because the NLRA provides that the Board must satisfy the

three-member quorum requirement “at all times.” Id. at 472

(quoting 29 U.S.C. § 153(b)) (emphasis in Laurel Baye). “The

Board quorum requirement therefore must still be satisfied,

regardless of whether the Board’s authority is delegated to a

group of its members.” Id. And when the Board has delegated

its authority to a panel of three that meets its own

two-member quorum requirement, that panel has authority to

act on behalf of the Board only so long as the Board has

authority to act as well—that is, when the Board has at least

three members. “[T]he Board cannot by delegating its

authority circumvent the statutory Board quorum requirement,

because this requirement must always be satisfied.” Id. at 473.

“The delegee group’s delegated power to act [therefore]

ceases when the Board’s membership dips below the Board

quorum of three members.” Id. at 475. The Board’s

approach—allowing a delegee panel of two members to wield

plenary Board authority even if those two members comprised

the entire active Board membership—would “allow the Board

to reduce its operative quorum to two without further

congressional authorization.” Id. Thus we found that under

the plain meaning of the statute a three-member delegee panel

acting “on behalf of the Board” may only do so when the

Board satisfies its quorum requirement. Id. (emphasis added).

Separately, we noted that our conclusion was bolstered

by analogy to common-law agency principles. According to

foreclosed); id. at 475 (explaining that the delegated authority of a

Board panel was “necessarily limited” by the NLRA’s quorum

requirement); id. at 476 (noting that “[a]ny change to the statutory

structure must come from the Congress, not the courts”).

16

the Restatement (Third) of Agency, we explained, “an agent’s

delegated authority terminates when the powers belonging to

the entity that bestowed the authority are suspended” and “is

also deemed to cease upon the resignation or termination of

the delegating authority.” Laurel Baye, 564 F.3d at 473. “The

statute confers no authority” on a delegee panel, but only

“permits” the Board to create such a committee. Id. “The only

authority by which the committee can act is that of the

Board,” and “[i]f the Board has no authority, it follows that

the committee” cannot exercise final authority in the place of

the Board, either. Id.

The Supreme Court took up the same question regarding

the Board’s authority to act without a quorum in New Process

Steel, L.P. v. NLRB, 560 U.S. 674 (2010), and reached a

similar conclusion based on different reasoning. The Supreme

Court’s interpretation of the plain terms of the statute led it to

conclude that the Board’s powers must “be vested at all times

in a group of at least three members.” Id. at 680. 3

3

The dissent suggests that we may never apply Chevron

deference to interpretations of section 3(b) because the Court did

not rely on Chevron at all in New Process Steel. Dissent at 6. There

are a number of cogent explanations that might explain why the

Court did not do so. Perhaps the Court simply concluded that the

Board was due no deference under any standard because the text of

the statute decided the question. Perhaps the Court viewed the

Board’s entitlement to Chevron deference as forfeited because the

Board had neglected to request deference at the court of appeals.

Perhaps the Court believed that the Board was not entitled to

deference because it relied on an OLC memorandum rather than

interpreting the statute itself. But the dissent offers no reason at all

justifying its contrary conclusion that New Process Steel prohibits

the application of Chevron to this precise section in any future case.

We will not take the extraordinary step of removing a provision

17

The Court specifically declined to consider the discussion

of agency law in Laurel Baye, explaining that “failure to meet

a quorum requirement [does not] necessarily establish that an

entity’s power is suspended so that it can be exercised by no

delegee. . . . [The] conclusion that the delegee group ceases to

exist once there are no longer three Board members to

constitute the group does not cast doubt on the prior

delegations of authority to nongroup members, such as the

regional directors . . . .” Id. at 684 n.4. Such prior delegations

to nongroup members involved a separate question that the

Court expressly did not address.

Laurel Baye does not control this case because it

confronted an entirely different situation based on different

statutory language and policy considerations, and neither

could have nor did reach the question we face here. Therefore

nothing in that opinion alters our conclusion that we owe

deference to the Board’s reasonable interpretation of the

statute. As noted above, in New Process Steel the Supreme

Court highlighted the distinction between the two types of

authority the Board may delegate to different actors. The

Board may delegate its plenary, final authority to decide cases

to a subgroup of its own members. It may also delegate

nonfinal authority to supervise elections, subject to review

and approval by the Board itself, to “nongroup” actors like the

from an agency’s interpretive reach without any basis for such a

holding. Of course, even if New Process Steel did somehow

foreclose Chevron deference, that unusual result would apply only

to the issue presented in that case: the authority of Board delegee

panels, not the authority of the Regional Directors. And even if

New Process Steel did somehow apply to the issue before us, we

would nonetheless be left with ambiguous statutory text.

18

Regional Directors. New Process Steel, 560 U.S. at 684 n.4.

This distinction between forms of delegated authority is

crucial. Laurel Baye considered only whether plenary, final

authority delegated to panels of the Board’s own members

could survive when the Board had no quorum; we concluded

that the delegation in question could not survive because it

was precluded by the plain meaning of the statutory provision

in question. Here, we must consider a different question,

arising from a different clause of the statute, involving

different analytical considerations: whether the statute vitiates

nonfinal authority already delegated to individuals outside the

Board’s membership when the Board loses its quorum. As the

Supreme Court expressly acknowledged, the two questions

are distinct, and the answer to one has no necessary logical

relationship to the answer to the other.

UC Health insists, however, that the agency discussion in

Laurel Baye prohibits the Board from interpreting the statute

to authorize Regional Directors to continue acting when the

Board has no quorum. We disagree. In Laurel Baye, we

analyzed the plain language of the statute and found that it

prohibited the Board from employing the delegation at issue

there without giving any deference to the Board at all. The

discussion of agency principles in that case confirmed our

interpretation of the statute’s plain meaning. Here, because

the text is ambiguous, we must defer to the Board’s

reasonable interpretation. For that reason, Laurel Baye’s

agency analysis could only possibly be relevant here if it

rendered the Board’s interpretation unreasonable with the

same clarity that the plain language of the statute, reinforced

by the principles of agency law, foreclosed the Board’s effort

in Laurel Baye to delegate its plenary, final authority even

when it had no quorum. But there is a fundamental difference

in the nature of the authority delegated in these two cases.

Therefore we conclude that Laurel Baye’s agency discussion

19

is simply off the mark in this case. A delegee panel, wielding

the Board’s plenary, final authority, speaks on the Board’s

behalf and in its place. The Regional Directors never similarly

occupy the Board’s role as a final decisionmaker. Indeed, the

statute and the Board’s own regulations expressly reserve for

the Board the power to review and reverse any determination

a Regional Director makes. 29 U.S.C. § 153(b); 29 C.F.R.

§ 102.67(c). 4 Therefore the statute makes clear that the

delegation at issue here does not implicate any of the concerns

that motivated us to draw on agency law in Laurel Baye.

Because the relationship between the Board and the Regional

Directors is so different from the relationship between the

Board and its delegee panels, we do not see how the agency

analysis in Laurel Baye sheds any light at all on the authority

the statute permits the Board to delegate to the Regional

Directors or when that authority expires. 5

4

The dissent claims that the right to appeal a Regional

Director’s decision is lost if the Board lacks a quorum. Dissent at 2

& n.1. This is incorrect. Even if the Board has no quorum when a

party appeals a Regional Director’s decision, nothing in the

regulation precludes the Board from taking up the objection once it

regains a quorum. See 29 C.F.R. § 102.67(c). The dissent suggests

that bad consequences might arise while appeals of Regional

Director determinations remain pending. This claim finds no

support in the record. In any event, considerations such as these

shed no light on the proper reading of the statute.

5

The dissent apparently takes issue with the fact that the

Board did not highlight this distinction in its brief. Dissent at 4. But

of course “[p]arties cannot waive the correct interpretation of the

law by failing to invoke it.” Zivotofsky ex rel. Zivotofsky v. Kerry,

135 S. Ct. 2076, 2101 n.2 (2015) (Thomas, J., concurring in the

judgment in part and dissenting in part) (citing EEOC v. FLRA, 476

U.S. 19, 23 (1986) (per curiam)).

20

The important distinction between the final authority

delegated in Laurel Baye and the nonfinal authority delegated

here is all the more clear in light of the materials on which we

relied in our agency analysis in Laurel Baye. All the sources

we cited dealt with an agent who had authority to speak

finally on the principal’s behalf with permanent legal effect.

See, e.g., Restatement (Third) of Agency § 3.07(4) (2006)

(explaining that an agent’s actual authority to affect its

principal’s legal relations expires when the principal’s power

to act is suspended); 2 William Meade Fletcher, Fletcher

Cyclopedia of the Law of Corporations § 504 (2008) (same,

with respect to the resignation or termination of the delegating

authority); Id. § 421 (“If there are fewer than the minimum

number of directors required by statute, [the remaining

directors] cannot act as a board.”); Emerson v. Fisher, 246

F. 642, 648 (1st Cir. 1918) (holding that a corporate

treasurer’s delegee lacks authority to disburse corporate funds

after the treasurer himself resigns). In every case the cited rule

prohibits an agent from taking some final action on behalf of

its principal at a time when the principal could not act itself.

And indeed, the ability to stand in the principal’s place is

fundamental to the existence of an agency relationship at all.

See Restatement (Third) of Agency § 1.01 cmt. c (“[T]he

concept of agency posits a consensual relationship in which

one person . . . acts as a representative of or otherwise acts on

behalf of another person with power to affect the legal rights

and duties of the other person.”). For example, in Emerson, an

assistant corporate treasurer continued to sign checks drawn

on corporate funds in the treasurer’s name after the treasurer

had resigned. 246 F. at 648. The First Circuit found that the

assistant treasurer could not take final actions in the place of

the treasurer when no individual held that office; wielding the

principal’s authority and signing checks in his stead was

forbidden without a treasurer in place whose authority the

assistant could exercise by proxy.

21

The outcome in Emerson and the issues identified in the

other authorities we cited in Laurel Baye were unmistakably

relevant to the issue we confronted in that case. There, the

Board had allowed a delegee panel to exercise the Board’s

plenary, final authority when the Board itself could not act at

all. The panel’s judgment was as final for the parties as the

full Board’s determination would have been. Allowing an

agent to act in those circumstances was at odds with basic

principles of agency law. But those principles have no bearing

here. No decision of the Regional Directors is ever final under

its own power. Only the acquiescence of the parties or the

Board’s ratification can give binding force to a Regional

Director’s determination. Therefore the Regional Directors

are not acting “on behalf of the Board” in the way that

doomed the Board’s tactic in Laurel Baye. 564 F.3d at 475

(emphasis added). And the agency analysis we expounded in

that case is not relevant here for the same reason.

In other words, a Regional Director never has the last say

on anything unless a party fails to object. In that event, it is

the parties’ choice to leave the Regional Director’s decisions

unchallenged that effectively makes the election final.

Otherwise, a Regional Director’s decision becomes final only

when approved by the Board. Of course, Board review is

discretionary even when a party files an objection to a

Regional Director’s decision. Nonetheless any objection will

always be considered by the Board, and it is the Board’s

action—declining to grant review or granting review and

upholding or reversing the Regional Director’s decision—that

finally commits the Board’s imprimatur. Obviously the Board

could not consider any objection to a Regional Director’s

determination when it did not satisfy the NLRA’s

three-member quorum requirement. But when the Board acts

with a quorum to review and approve a Regional Director’s

22

decision, the Board, not the Regional Director, has decided

the issue. Unlike in Laurel Baye, this delegation does not

allow some other actor to stand in the Board’s place and wield

its authority when it is otherwise statutorily immobilized.

Therefore the agency principles that bolstered our statutory

conclusion in Laurel Baye are as irrelevant in this case as is

our discussion there of a different clause of the statute. 6

6

The dissent suggests that, by declining to consider or adopt

the agency analysis in Laurel Baye, the Court in New Process Steel

understood Laurel Baye to have implicitly decided the issue this

case presents. Dissent at 3. It is far from clear whether it would

make any difference if the Court actually expressed a view, in dicta,

of the implicit scope of one of our decisions. Even so, we disagree

that the Court expressed any such opinion. The Court

acknowledged, as have we, that Laurel Baye relied on statutory and

agency grounds to foreclose the Board’s agents from acting when

the Board could not act. But the Court did not explain its view of

how far Laurel Baye’s reasoning necessarily extended any more

than Laurel Baye itself offered such an explanation. And after all,

New Process Steel, like Laurel Baye, decided a different question

from the issue before us here. Whether the agency analysis in

Laurel Baye necessarily also applies to “nongroup” actors like the

Regional Directors was, the Court explained, “a separate question.”

New Process Steel, 560 U.S. at 684 n.4.

Nor do we think the dissent is correct that other circuits’

pronouncements militate in favor of extending Laurel Baye to reach

delegations to the Regional Directors—an issue not raised in that

case. Dissent at 3 & n.3. It is true that several other courts since

New Process Steel have declined to apply the broadest possible

reading of our agency analysis in Laurel Baye to the distinct

question of whether the Board’s General Counsel may continue to

exercise authority when the Board has no quorum. But the

noteworthy point is that these circuits all agree with our

fundamental conclusion: The broad, general expressions of

common law agency principles stated in the different context of

23

Indeed, we are all the more persuaded that the Board’s

interpretation of the statute is reasonable in light of the

structural distinction between the final character of its

authority to adjudicate unfair labor practice cases and the

nonfinal authority to oversee representation elections it may

delegate to the Regional Directors. Because any contested

decision a Regional Director makes is not final until the

Board acts, it is immaterial whether the Board had a quorum

at the time the Regional Director conducted the election. To

the contrary, when the Regional Directors exercise their

delegated authority to oversee elections, they further the

policy of the statute by increasing the efficiency with which

representation elections are held—irrespective of the Board’s

status at that time.

For all these reasons, there is nothing in Laurel Baye or its

broad discussion of principles of agency law that controls the

Board’s interpretation of its authority in this case. As shown

above, the Board’s interpretation of its authority was

reasonable, and we are bound to defer to the Board’s

reasonable interpretation of the statute it is charged to

administer. See City of Arlington, 133 S. Ct. at 1870-71.

Laurel Baye are not persuasive in the context of non-Board

delegees. We have explained why the fundamental differences

between the authority delegated in Laurel Baye and the authority

delegated to the Regional Directors here render Laurel Baye

irrelevant. See Restatement (Third) of Agency § 1.01 cmt. c (“[T]he

concept of agency posits a consensual relationship in which one

person . . . acts as a representative of or otherwise acts on behalf of

another person with power to affect the legal rights and duties of

the other person.”). Neither New Process Steel nor the circuit cases

cited in the dissent erase that structural distinction. In fact, they are

all best read to support it.

24

III

For the foregoing reasons, we deny UC Health’s petition

for review and grant the NLRB’s cross-application for

enforcement of its order.

EDWARDS, Senior Circuit Judge, concurring: The dissent

is mistaken in suggesting that if the rationale or logic

supporting a decision in one case is stated broadly enough to

cover future cases not at issue, the latter cases are necessarily

controlled by the earlier case. Were this the law, appellate

decisionmaking would be a mischievous enterprise.

****

It is well understood that “[t]he doctrine of stare decisis

is of fundamental importance to the rule of law.” Welch v.

Tex. Dep’t of Highways & Pub. Transp., 483 U.S. 468, 494

(1987). Stare decisis – to stand by things decided – embraces

the principle that each judicial decision is a statement of law

(or precedent) that may have binding force in future cases.

“Stare decisis . . . ‘promotes the evenhanded, predictable, and

consistent development of legal principles, fosters reliance on

judicial decisions, and contributes to the actual and perceived

integrity of the judicial process.’” Hohn v. United States, 524

U.S. 236, 251 (1998) (quoting Payne v. Tennessee, 501 U.S.

808, 827 (1991)). “For judges, the most basic principle of

jurisprudence is that we must act alike in all cases of like

nature” because “[i]nconsistency is the antithesis of the rule

of law.” LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir.

1996) (en banc) (internal quotation marks omitted).

A judicial decision is viewed as “precedent” when it

controls the disposition of a pending case. Whenever a court

faces a situation in which a prior judicial decision has some

similarity to a pending case, the judges must initially

determine the rule established by the decision in the first case,

limited by the context in which the judgment was reached.

Then the judges must determine whether the rule of the prior

case controls the disposition of the pending case. It is easy to

subscribe to the goal of stare decisis. It is not always easy,

however, to determine when a prior case qualifies as

controlling precedent. See Jeremy Waldron, Stare Decisis and

2

the Rule of Law: A Layered Approach, 111 MICH. L. REV. 1

(2012) (discussing applications of stare decisis); Ruggero J.

Aldisert, Precedent: What It Is and What It Isn’t; When Do

We Kiss It and When Do We Kill It?, 17 PEPPERDINE L. REV.

605 (1990) (same). Nonetheless, there are several important

principles that the courts routinely follow in determining the

applicability of precedent to the cases before them.

First, “an issue of law must have been heard and decided”

in the same or a higher court for a decision to have

precedential value with respect to that issue. Gately v.

Massachusetts, 2 F.3d 1221, 1226 (1st Cir. 1993) (quoting

EEOC v. Trabucco, 791 F.2d 1, 4 (1st Cir. 1986)). Second, “if

an issue is not argued, or though argued is ignored by the

court, or is reserved, the decision does not constitute a

precedent to be followed” with respect to that issue. Id. Third,

a judicial decision “attaches a specific legal consequence to a

detailed set of facts.” Allegheny Gen. Hosp. v. NLRB, 608

F.2d 965, 969–70 (3d Cir. 1979). The decision “is then

considered as furnishing the rule for the determination of a

subsequent case involving identical or similar material facts.”

Id.; see also United States v. Holyfield, 703 F.3d 1173, 1177

& n.7 (10th Cir. 2013) (citing Allegheny’s definition of

precedent approvingly). Fourth, as Chief Justice Marshall

explained in his seminal opinion in Cohens v. Virginia, 19

U.S. (6 Wheat) 264 (1821):

It is a maxim, not to be disregarded, that general

expressions, in every opinion, are to be taken in

connection with the case in which those expressions are

used. If they go beyond the case, they may be respected,

but ought not to control the judgment in a subsequent

suit, when the very point is presented for decision. The

reason of this maxim is obvious. The question actually

before the court is investigated with care, and considered

3

in its full extent. Other principles which may serve to

illustrate it, are considered in their relation to the case

decided, but their possible bearing on all other cases is

seldom completely investigated.

Id. at 399–400.

This last precept – that the force of a general expression

enunciated in a prior decision must be limited by reference to

its specific context – is so firmly embedded in stare decisis

jurisprudence that the Supreme Court has called it a “canon of

unquestionable vitality.” Landgraf v. USI Film Prods., 511

U.S. 244, 265 (1994). Indeed, the Court has said that it is the

“duty” of judges “to restrict general expressions in opinions in

earlier cases to their specific context.” Int’l Bhd. of Teamsters

Local 309 v. Hanke, 339 U.S. 470, 480 n.6 (1950) (plurality

opinion) (emphasis added). See also, e.g., King v. Morton,

520 F.2d 1140, 1147 (D.C. Cir. 1975) (“Chief Justice

Marshall warned against basing decisions on bare general

principles enunciated in other cases. . . . The simple words of

the opinions [cited by appellant] are not as important as the

contexts in which those cases were decided.”).

The obvious point is that the precedential value of a

decision is defined by the context of the case from which it

arose. If, in light of that context, the decided case is materially

or meaningfully different from a superficially similar later

case, the holding of the earlier case cannot control the latter.

Determining the proper scope of the rule of a prior

decision can be controversial. In his illuminating article on

“Stare Decisis and the Rule of Law,” Professor Waldron

points out that “[l]egal realists and critics are fond of”

accusing judicial panels of formulating the rule of prior

decisions as they see fit “in order to suit [their] own view[s]

4

about how the case in front of [them] should be decided.”

Waldron, supra, at 26. He urges that, to avoid this pitfall in

decisionmaking, judicial panels should be ever mindful that

the rule of law commands them to view precedent “in a

responsible spirit of deference.” Id. I agree.

However, as Professor Waldron notes, the ascertainment

of the rule of a prior case and the determination whether the

prior case constitutes a binding precedent that controls the

disposition of a pending case are nuanced enterprises.

One case may seem superficially similar to another, but

the judge[s on the second panel] may be convinced that

there are differences that preclude simply subjecting a

subsequent case to the same rule that decided the

precedent case. . . . For example, a given statutory

provision may apply properly to one case but not another,

even though the second is superficially similar to the

first; therefore, we “distinguish” the second case. And

similarly, the rule that [the first panel] figured out as a

basis for [its] decision in the precedent case may not

apply to a subsequent case despite superficial similarities.

There may be things about the second case that pose a

distinct legal problem, which require a new and distinct

law-like solution to be figured out by [the second panel]

in the form of a rule . . . . To distinguish a case, then, is

not just to “come up with” some difference. It is to show

that the logic of what [the first panel] figured out does

not, despite appearances, apply. It means pointing to

some additional problematic feature of the subsequent

case that requires additional figuring.

Id. at 25–26. Courts routinely follow these principles of

precedent application. Looking to the context of the putative

controlling decision – the facts, the statutory or constitutional

5

provisions at issue, the arguments made by the parties and

decided or reserved by the court, and the rationale underlying

the decision – they determine whether the holding of an

existing case controls the outcome of a pending case. See,

e.g., Humphrey’s Executor v. United States, 295 U.S. 602,

626–28 (1935) (distinguishing the pending case from the cited

precedent because the situations were “so essentially unlike”

each other); United States v. Thomas, 361 F.3d 653, 662–63

(D.C. Cir. 2004) (applying precedent selectively to two

defendants’ cases based on factual similarities and

dissimilarities to the prior case), reinstated following vacatur

sub nom. United States v. Cook, 161 Fed. App’x 7 (D.C. Cir.

2005).

****

Here, the considerations guiding the application of

precedent make clear that, although Laurel Baye Healthcare

of Lake Lanier, Inc. v. NLRB, 564 F.3d 469 (D.C. Cir. 2009),

is “superficially similar” in some respects to the case

presently before the court, it does not control the resolution of

the legal question presented in this case. First, as Judge

Griffith’s opinion explains, the facts of Laurel Baye are very

different from the facts of this case. And facts matter in

determining the precedential value of a prior case. See, e.g.,

Armour & Co. v. Wantock, 323 U.S. 126, 132–33 (1944)

(“[W]ords of our opinions are to be read in the light of the

facts of the case under discussion. . . . General expressions

transposed to other facts are often misleading.”). Second, just

as significantly, Laurel Baye did not involve the statutory and

regulatory provisions that are principally at issue in this case.

Finally, and most importantly, Laurel Baye did not in any way

address the question of the deference due the Board’s

construction of either the particular provisions of the statute at

issue here or any other provisions of the Act. This appears to

6

be because the Board never offered an interpretation of the

Act for which deference was sought.

We face a very different situation in this case than the

situation faced by the court in Laurel Baye. Here, the Board

has offered a reasonable interpretation of statutory language

in the Act – statutory language different from the statutory

provisions at issue in Laurel Baye. And as Judge Griffith

explains, the Board’s interpretation is one to which we must

defer pursuant to the firmly established principles enunciated

by the Supreme Court in Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 843 (1984).

Alternatively, as Judge Srinivasan contends, see SSC Mystic

Operating Co. v. NLRB, No. 14-1045 (D.C. Cir. September

__, 2015) (Srinivasan, J., concurring), we must defer to the

Board because a court’s prior judicial construction of a statute

does not trump an agency construction that is otherwise

entitled to deference under Chevron unless “the prior court

decision holds that its construction follows from the

unambiguous terms of the statute and thus leaves no room for

agency discretion.” Nat’l Cable & Telecomms. Ass’n v. Brand

X Internet Servs., 545 U.S. 967, 982 (2005). Under either

view, Laurel Baye is not binding precedent here because the

relevant terms of the statute at issue in this case are

unquestionably ambiguous.

In sum, the decision in Laurel Baye does not control the

judgment in this case. This case poses what Professor

Waldron would call a “distinct legal problem” that was

neither raised by the parties nor addressed by the court in

Laurel Baye. Consequently, “[a]ny observations [from that

opinion] which could be regarded as having a bearing upon

the question now before us would be taken out of their proper

relation.” Wright v. United States, 302 U.S. 583, 593 (1938);

see also Whitacre v. Davey, 890 F.2d 1168, 1172 (D.C. Cir.

7

1989) (“We cannot count as controlling a decision that never

touched upon the issue we confront” when that point “was

simply not considered” in the prior case). The general

expressions from Laurel Baye to which the dissent refers

cannot be confused with binding precedent. To rely on these

general expressions, taken from a case whose context is

materially different from the case before us, flies in the face

of the core principles of stare decisis. See Weyerhauser v.

Hoyt, 219 U.S. 380, 394 (1911) (“[G]eneral language” used in

a prior opinion should not be “separated from its context and

disassociated from the issues which the case involved” and

then given controlling weight.).

The dissent suggests that we have betrayed “the most

important characteristic of a collegial appellate court” by

failing to give “careful attention [and] respect” to the law of

the circuit. It is hard to take this claim seriously because it is

premised on misguided notions of stare decisis. I therefore

view the dissent’s unfortunate statement as nothing more than

a poignant example of hyperbole.

SILBERMAN, Senior Circuit Judge, dissenting: The merits

of this case are not particularly important. I doubt whether we

will see many situations in which an NLRB regional director

certified an election during a period in which the NLRB lost its

quorum, and that certification is subsequently challenged in an

unfair labor practice proceeding. But, the case is nevertheless

of great significance because the most important characteristic

of a collegial appellate court is careful attention, respect, and

adherence to precedent. I am afraid the majority opinion is a

glaring example of a contrary approach.

I have previously authored an opinion in which I was faced

with conflicting lines of authority because of my colleagues’

failure to follow prior precedent, see Vietnam Veterans of

America v. Shinseki, 599 F.3d 654 (D.C. Cir. 2010) (Silberman,

J.), which I regarded then, and do now, as most unfortunate. Of

course, every case with which we are presented has some factual

difference, but not every case is legally distinguishable from

every other. In deciding whether a new case is covered by

previous precedent, it is the logic of the previous case’s holding

that is determinative. Petitioner’s brief elegantly argued,

succinctly, that we were bound by our prior decision in Laurel

Baye Healthcare of Lake Lanier, Inc. v. NLRB, 564 F.3d 469

(D.C. Cir. 2009). I think petitioner is exactly correct and that

should be the end of the matter.

I.

The majority concludes that section 3(b) of the National

Labor Relations Act, authorizing the Board to delegate to

regional directors – civil servants, not political appointees –

power to certify the results of an election, means that that power

remains indefinitely in the regional director, even if the Board

itself disappears (perhaps, because of a failure of the Senate to

confirm any appointee). This power supposedly resides

permanently in the regional director, even though the statute

specifically provides that any interested party can appeal a

2

regional director’s determination to the Board. And if the Board

loses its quorum, or goes out of existence, that appeal right is

lost.1

But even if a Board were to read its regulation to permit an

appeal of a regional director’s decision out of time – perhaps

years later when a Board regained a quorum – the majority

ignores the impact of a regional director’s certification in the

interim. An employer who refuses to recognize that certification

may pay a price in labor relations. And the regional director’s

decision with respect to issues such as objectional conduct may

deviate from Board policy.

As I discuss below, I think this construction would be a

stretch, even if we were considering section 3(b) de novo, but

we are not. We are bound by our prior opinion in Laurel Baye.

In that case, we considered whether a Board delegation of all of

its power to a subgroup of only three survived the drop in

membership of the subgroup (and the Board) to only two.

Although the statutory language is convoluted, we relied on two

factors to conclude that the Board’s powers had lapsed. We

focused first on the most persuasive language – “[t]he quorum

provision clearly requires that a quorum of the Board is, ‘at all

times,’ three members,” id. at 473 (citing 29 U.S.C. § 153(b)) –

but we also relied on general agency principles reasoning

broadly that an agent – in that case, the two member Board

panel – lost its authority when the Board – the principal – lost its

quorum. We never mentioned Chevron, implicitly concluding

that the combination of the two factors ineluctably pointed to

only one interpretation. As Judge Sentelle writes in the

1

A party must seek Board review within 14 days of the regional

director’s issuance of a final disposition. 29 C.F.R. § 102.67(c) (as

amended Dec. 15, 2014). The majority’s reading of the regulation

appears incorrect.

3

companion case, “Laurel Baye concluded that § 153(b)’s

quorum requirement provision unambiguously requires the

Board to have a quorum for a delegee to exercise its authority.”

SSC Mystic Operating Co., Slip op. at 2 (Sentelle, J.,

dissenting). The Supreme Court, reviewing the same issue in

New Process Steel v. NLRB, came to the same conclusion, that

the Board had lost its authority, but it relied primarily on

different language in the section.2 560 U.S. 674, 679-83 (2010).

It explicitly did not adopt the general agency principles so

important to our reasoning, recognizing that to do so would

decide the very issue now before us – whether a regional

director’s authority survives the loss of Board membership. Id.

at 684 n.4. The Supreme Court wanted that issue to remain open

in its court, but – and this is the crucial point – the Court

implicitly recognized that it did not remain open in our court.

Moreover, even though our sister circuits declined to adopt

Laurel Baye, they have uniformly read it as did the Supreme

Court: as having decided the validity of board delegations to

nonmembers in the absence of a quorum.3 Our agency

2

Although the Supreme Court’s footnote four is at least clear in not

adopting Laurel Baye’s agency rationale, its reasoning explaining why

it does not is impenetrable.

3

See Kreisberg v. HealthBridge Mgmt., LLC, 732 F.3d 131, 140 (2d

Cir. 2013); Frankl v. HTH Corp., 650 F.3d 1334, 1354 (9th Cir.

2011); Osthus v. Whitesell Corp., 639 F.3d 841, 844 (8th Cir. 2011);

Overstreet v. El Paso Disposal, L.P., 625 F.3d 844, 852-54 (5th Cir.

2010) (“[Laurel Baye] held that when the Board’s membership drops

to two, it loses its quorum and ‘[i]n the context of a board-like entity,

a delegee’s authority therefore ceases the moment the vacancies or

disqualifications on the board reduce the board’s membership below

a quorum.’”). These circuit cases deal with the General Counsel of the

Board’s authority to continue to seek 10(j) injunctions when the Board

loses its quorum. Board delegations of duties to the General Counsel

are governed by a separate statutory provision. See 29 U.S.C.

4

reasoning was not, as the majority puts it, “separate,” it was

integral to Laurel Baye’s statutory interpretation, and therefore

applies equally to our case. Indeed, it is a fortiori because we

are dealing with a delegation, not to a subgroup of Board

members, but rather to a much lesser-ranked official, a regional

director.

Notwithstanding the Supreme Court’s interpretation of

Laurel Baye, the majority would distinguish that case on the

theory that a delegation to an agent with lesser authority (a

regional director) somehow survives the disappearance of the

principal, even though a more senior agent’s authority would

not. It should be noted, the majority does not cite any case so

holding. To give the government its due, the Board never makes

this cockamamie argument (I thought we avoided relying on

arguments not presented by parties because to do so suggests

we are result-oriented). In any event, I do not understand why

the regional director’s authority is described as “non-final” when

the very issue in this case is whether the regional director’s

certification of an election is final.

II.

As I noted above, I think that if we were not bound by

Laurel Baye, I would still regard the Board’s contention that the

regional director’s authority to certify an election extends

indefinitely, even if the Board went out of existence for years,

as an impermissible construction of the statute.

§ 153(d). The General Counsel – a Presidential appointee – has

unreviewable discretion to seek a complaint whether or not the Board

is in existence. Therefore it is reasonable to conclude that the Board’s

permanent delegation to the General Counsel to seek an injunction is

simply an addition to his or her authority to file a complaint.

5

The majority acknowledges the statute does not address the

question whether the regional director’s power lapses when the

Board loses its quorum or ceases to exist, but contends that that

is a statutory “silence” under the Chevron doctrine, which the

NLRB is authorized to fill. And it asserts that the Board’s

interpretation is reasonable under Chevron’s second step.

Actually, if Chevron applied, I think such an interpretation

would be flatly unreasonable. We must bear in mind that even

if we are following Chevron’s second step, we are construing a

Congressional act – the second step is not open sesame for the

Agency. After all, the rest of that statutory section deals

specifically, although in a rather convoluted fashion, with the

circumstances in which the Board loses authority because of a

lack of a quorum. It is quite incredible that Congress would

nevertheless have implicitly bestowed on regional directors

permanent authority ad infinitum, even in the total absence of a

supervising Board. It should be noted that neither the majority

opinion nor Judge Edwards’s and Judge Srinivasan’s

concurrences grapple with the statutory structure or language to

reach their conclusion that the interpretation they adopt is

actually “reasonable.”

Be that as it may, we cannot affirm the Board based on

Chevron deference in this case. The Board never purported to

interpret an ambiguity in the statute. Instead, it boldly asserted

that, pursuant to the statute, “NLRB Regional Directors remain

vested with the authority to conduct elections and certify their

results regardless of the Board’s composition at any given

moment.” UC Health & UC Health Pub. Safety Union, 360

N.L.R.B. No. 71, *1 n.2 (Mar. 31, 2014). We have held

repeatedly that “[d]eference to an agency’s statutory

interpretation is only appropriate when the agency has exercised

its own judgment, not when it believes that interpretation is

compelled by Congress.” Arizona v. Thompson, 281 F.3d 248,

254 (D.C. Cir. 2002) (internal citations and emphasis omitted).

6

See also Peter Pan Bus Lines, Inc. v. Fed. Motor Carrier Safety

Admin., 471 F.3d 1350, 1354-55 (D.C. Cir. 2006); Transitional

Hosps. Corp. v. Shalala, 222 F.3d 1019, 1029 (D.C. Cir. 2000).

The majority argues that the Board never explicitly stated that

the statute compelled the construction, but what else can the

Board have intended when it flatly states what the statute

meant.4

Moreover, the Supreme Court has rejected Chevron’s

applicability to section 3(b). Even though the language the

Supreme Court relied on, as I noted, is rather convoluted, the

Supreme Court’s opinion in New Process Steel never mentioned

Chevron – despite the government’s reliance on Chevron

deference in its Supreme Court brief. Although the Court’s

opinion frankly acknowledged two possible interpretations of

what it called section 3(b)’s delegation clause, it simply picked

the one it thought preferable – leading to the same result we

chose in Laurel Baye. See New Process Steel, 560 U.S. at 679-

83. It is, therefore, decisive, for our purposes, that the Court

implicitly but necessarily concluded that, for whatever reason,

Chevron deference was inappropriate in construing section 3(b).

See SSC Mystic Operating Co., Slip op. at 2–3 (Sentelle, J.,

dissenting). In that regard, the other circuits, construing the

companion language dealing with the General Counsel’s

delegated authority to seek 10(j) injunctions, have followed the

Supreme Court’s lead and have ignored Chevron.5

***

4

If the majority was correct in concluding that Chevron applied, it

certainly should remand and allow the agency to exercise its judgment.

See PDK Labs. Inc. v. U.S. DEA, 362 F. 3d 786, 798 (D.C. Cir. 2004).

5

With the exception of one concurring Eighth Circuit Judge. See

Osthus, 639 F.3d at 845-48 (Colloton, J. concurring).

7

Judge Srinivasan’s concurrence in the companion case

disagrees with the majority’s conclusion that the panel’s

decision in Laurel Baye was based on an unambiguous reading

of the plain language, and chooses to read Laurel Baye as only

adopting the “best” reading of an ambiguous statute.6 By so

doing, Judge Srinivasan essentially accuses the Laurel Baye

panel of disregarding governing law applying to judicial review

of agency statutory interpretations in formal adjudication. That

governing law, Chevron – with certain specific exceptions, such

as avoidance of serious constitutional issues7 – for over thirty

years has banned courts of appeal from doing exactly what

Judge Srinivasan accuses the Laurel Baye panel of doing;

rejecting an agency statutory interpretation of supposedly

ambiguous language in favor of what a reviewing court believes

is a better or best reading.

Judge Srinivasan relies on Brand X as support for his

analysis – suggesting that it allows a court reviewing agency

interpretation of ambiguous language to choose the better

interpretation. But that is a flagrant misreading of the case.

Brand X applies in situations quite apart from Laurel Baye. The

first is the question of how do reviewing courts deal with a pre-

6

Judge Srinivasan ignores the fact that the Supreme Court’s decision -

both the majority and the dissent as Judge Sentelle points out, see SSC

Mystic Operating Co., Slip op. at 2 (Sentelle, J., dissenting) – ignored

Chevron, or its doctrine, in deciding New Process Steel – which

certainly indicates, as I have argued above, that Chevron is not to be

used in interpreting section 3(b), as Judge Srinivasan does. Granted,

the Supreme Court in New Process Steel did ignore Chevron without

explanation, but it is not subject to the same restraints which bind

lower federal courts.

7

See Edward J. DeBartolo Corp. v. Florida Gulf Coast Building &

Construction Trades Council, 485 U.S. 568 (1988).

8

Chevron judicial decision if the agency subsequently disagrees.

The Supreme Court explained that if a prior judicial decision

announced the only acceptable interpretation of a statute that

opinion governed, but if the earlier judicial opinion – properly

read – only relied on a better interpretation, the agency was free

to adopt a different reasonable construction. The second

situation involves a judicial affirmance of a prior agency

interpretation. Again, the agency can change its interpretation

to another reasonable one if the prior judicial opinion was

limited to accepting the agency interpretation as reasonable. The

third situation, as occurred in Brand X itself, is when an agency

departs from a prior judicial decision that had reviewed the

interpretation of an entity not entitled to Chevron deference.8

Because the previous court needn’t have deferred under

Chevron, it may have opted for the “best,” but not the only

permissible, interpretation. The agency may thus later adopt

another reasonable construction. None of those situations apply

here. Brand X hardly suggested that in the future courts may

reject a federal agency statutory interpretation as not the “best

one,” which would be inconsistent with Chevron.

Judge Srinivasan suggests, although he does not quite

assert, that significance should be placed on the fact that the

NLRB did not seek Chevron deference in Laurel Baye. But that

is often true when an agency believes its interpretation is

compelled by the statute. Indeed, in Laurel Baye, as in many

other cases, the agency flatly asserted that its reading resulted

8

Brand X reviewed an agency interpretation that departed from a

previous judicial construction in AT&T Corporation v. City of

Portland, 216 F.3d 871 (9th Cir. 2000). AT&T itself did not apply

Chevron in its analysis – and opted for the best, not the only,

interpretation – because it was reviewing the construction of a local,

municipal franchising board (an entity to which Chevron deference

was not owed).

9

from the plain language of the statute, rather than an exercise in

discretion. That is not a hypothesis, as Judge Srinivasan

suggests; it is the obvious reading of the Board’s decision. And

as Judge Sentelle points out, because the statute was thought by

the panel to be unambiguous, Chevron was irrelevant. The

important principle of administrative law is that federal courts

of appeals for almost 30 years have followed Chevron’s

command (with certain recognized exceptions) that agency

interpretations of ambiguous language in a formal adjudication,

see United States v. Mead Corp., 533 U.S. 218 (2001), are

entitled to deference and affirmance if reasonable. That is so –

and there are no deviations in our cases – notwithstanding

whether Chevron’s familiar two-step analysis is explicitly

“walk[ed] through,” see SSC Mystic Operating Co., Slip op. at

3 (Srinivasan, J., concurring). If we think, notwithstanding the

agency’s claims, that a statute is actually ambiguous, we are not

free to disregard Chevron and opt for our own “best” reading, as

Judge Srinivasan seems to suggest we can. We must instead

remand to an agency for its subsequent resolution of the

ambiguity. See PDK Labs. Inc. v. U.S. DEA, 362 F. 3d 786, 798

(D.C. Cir. 2004). Chevron is as much a principle of judicial

review of agency action as is Chenery9 or Vermont Yankee.10

Judge Srinivasan searches for another reason Chevron may

not have been applied. He suggests that the Laurel Baye panel

may have secretly denied deference based on an argument made

by the company in Laurel Baye – that Chevron deference was

inappropriate because the issue went to the Board’s jurisdiction.

To be sure, this was a question which once troubled panels of

this court. See New York Shipping Ass’n, Inc. v. Federal

9

See SEC v. Chenery Corp.,332 U.S. 194 (1947).

10

See Vermont Yankee Nuclear Power Corp. v. Natural Resources

Defense Council, 435 U.S. 519 (1978).

10

Maritime Comm’n, 854 F.2d 1338, 1363 (D.C. Cir. 1988); Nat’l

Wildlife Fed’n v. ICC, 850 F.2d 694, 699 (D.C. Cir. 1988);

American Civil Liberties Union v. FCC, 823 F.2d 1554, 1567

n.32 (D.C. Cir. 1987). But since 1990 we have consistently

rejected that concept as an exception to Chevron.11 See

Connecticut Dep’t of Pub. Util. Control v. FERC, 569 F.3d 477,

481 (D.C. Circ. 2009); Nat’l Ass’n of Regulatory Util. Comm’rs

v. FERC, 475 F.3d 1277, 1279 (D.C. Cir. 2007); Detroit Edison

Co. v. FERC, 334 F.3d 48, 53 (D.C. Cir. 2003); Transmission

Access Policy Study Group v. FERC, 225 F.3d 667, 694 (D.C.

Cir. 2000); Oklahoma Natural Gas Co. v. FERC, 28 F.3d 1281,

1284 (D.C. Cir. 1994); Bus. Roundtable v. SEC, 905 F.2d 406,

408 (D.C. Cir. 1990). The cases cited by Judge Srinivasan, with

all due respect for the University of Illinois Law Review, do not

stand for the contrary proposition; they don’t even mention

agency “jurisdiction.” It is flatly inconceivable that any panel

would accept Judge Srinivasan’s hypothetical reasoning sub

silentio.12

In sum, since Laurel Baye failed to accept the agency’s

interpretation, it must have been because it determined that the

language was susceptible of only one meaning. It is the only

explanation of Laurel Baye consistent with both Supreme Court

commands and our own precedent.

***

11

Of course, the Supreme Court subsequently put the issue to rest in

City of Arlington v. FCC, 133 S. Ct. 1863 (2013).

12

It is worth noting that the Laurel Baye panel members Judges

Williams, Sentelle, and Tatel had, collectively, nearly 60 years of

experience reviewing agency statutory interpretations.

11

Three of my colleagues have explored reasons not to

follow Laurel Baye. I think they are all unpersuasive; Laurel

Baye is binding precedent.

Regretfully I dissent.