The media has reported this decision as a loss for Obama, in a 9-0 vote. However, when one looks at the actual decision, it is apparent that it was a split decision, 5-4, with the liberals prevailing. At issue is a poorly-written and ambiguous provision of the constitution which gives the president the power “to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”
The majority opinion, endorsed by the court's four liberals plus the middle-of-the-road Justice Kennedy, held that the appointments at issue were illegal because they did not fall within the definition of "recess", since the Senate met for a pro forma session every three days to ostensibly stay in business, and thus thwart the president's power to make recess appointments. This seems wrong on the face of it, since it is exalting "form over substance", something we lawyers are taught not to do. The Senate was, as a practical matter, not in session during the time of the appointments, even though it claimed to be.
The real issue here is the interpretation of the word "happen". The dispute is whether the vacancy has to arise during the recess, or whether the president can fill a vacancy which arose before the recess, but continued during the recess. The four dissenters (actually concurring justices), felt that the vacancy has to arise during the recess. The majority pointed out, correctly, that this holding would contradict two centuries of actual practice, and would thus be an extreme overreaching of judicial power.
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