A panel of U.S. judges on Monday seemed likely to rule that Amazon.com (AMZN.O) and Elon Musk's SpaceX were too quick to bring their challenges to the National Labor Relations Board's structure to an appeals court.
A growing number of companies are going on the offensive against the NLRB, filing lawsuits around the country that claim aspects of its in-house enforcement proceedings violate the U.S. Constitution, and Monday's cases are among the first to reach federal appeals courts.
The legal challenges could hobble the board's powers if successful, and even if they fail some have already succeeded in indefinitely delaying NLRB cases. Three judges in Texas have temporarily blocked board cases from moving forward, while at least six judges in other states have refused to do so.
Amazon and SpaceX say federal judges in Texas "effectively denied" their petitions to block NLRB cases pending the outcome of their lawsuits by not ruling on them more quickly.
The judges in both cases ultimately ruled that the lawsuits did not belong in Texas. Amazon's case was transferred to Washington, D.C, and SpaceX's lawsuit to California, though the transfers have been stayed pending appeals.
The 5th Circuit on Monday heard each case separately, and the judges were largely silent about the merits of the challenges to the NLRB's structure. Instead, they suggested that it was improper for the companies to impose arbitrary deadlines and then file appeals before the lower courts had a chance to rule.
Circuit Judge James Graves noted that in Amazon's case, the judge had asked for final briefs to be filed by the same day that the company had said it wanted a ruling, making it clear that he was unlikely to meet Amazon's deadline.
“You had to have expected he's going to receive a brief at the end of the day and then rule on it the very same day, and if not it’s an effective denial. That just doesn’t seem reasonable to me,” Graves, an appointee of Democratic former President Barack Obama, said to Amazon's lawyer, Trevor Cox.
And Circuit Judge Irma Ramirez questioned whether SpaceX had shown that the judge deliberately delayed a ruling, which has typically been required to prove an effective denial. Ramirez is an appointee of Democratic President Joe Biden.
SpaceX's lawyer, Michael Kenneally, said the judge had two months to issue a decision and that his failure to do so allowed an NLRB administrative judge to rule on issues related to discovery of documents in the underlying case. Cox similarly said that the judge in Amazon's case "had plenty of time" to consider the company's request.
SpaceX is accused of firing engineers because they were critical of Musk, the rocket maker's CEO, which it has denied. Amazon is seeking to block the five-member NLRB from ruling on whether the company must bargain with the first union in its history at a warehouse in New York City.
NLRB lawyer Tyler Wiese, who argued both cases, told the panel that the companies had no authority to set "imaginary deadlines" in order to expedite rulings, and he blamed the companies for delaying the litigation by fighting the board's attempts to have the cases transferred out of Texas.
The 5th Circuit panel includes Circuit Judge Priscilla Richman, an appointee of Republican former President George W. Bush, who peppered both sides with questions about whether there had been effective denials in each case.
The 5th Circuit is widely considered the most conservative federal appeals court, with 12 of its 17 judges appointed by Republican presidents, but Monday's panel is relatively moderate. If the companies lose, they could ask the full 5th Circuit to review the cases.
The cases are Amazon.com Services v. NLRB and Space Exploration Technologies v. NLRB, 5th U.S. Circuit Court of Appeals, Nos. 24-50761 and 24-40315.
For Amazon: Trevor Cox of Hunton Andrews Kurth
For SpaceX: Michael Kenneally of Morgan Lewis & Bockius
For the NLRB: Tyler Wiese
For the union in Amazon's case: Julie Gutman Dickinson of Bush Gottlieb
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