Amazon, SpaceX Cases Against NLRB Meet Skeptical Fifth Cir. (2)

Amazon.com Inc. and SpaceX faced tough questioning from federal appeals court judges who appeared doubtful that either company could challenge district courts’ failure to rule on their requests to halt National Labor Relations Board cases.

During separate oral argument sessions Monday, the same panel of judges on the US Court of Appeals for the Fifth Circuit grilled lawyers for Amazon and SpaceX over their assertions that district judges effectively denied their preliminary injunction requests by not meeting the companies’ deadlines to freeze administrative proceedings at the NLRB.

A ruling that sends the cases back to district court would likely avoid reaching the merits of the constitutional arguments that Amazon and SpaceX raised in their respective lawsuits.

The two companies—founded by the world’s two richest men—brought some of the same allegations against the NLRB. Jeff Bezos’ Amazon and Elon Musk’s SpaceX contested the constitutionality of board members’ removal protections, the agency’s adjudication of labor law claims absent a jury, and board members authorizing the agency to seek court injunctions in the same cases that they will ultimately rule on.

Space X also argued the agency’s in-house judges are unconstitutionally protected from being fired.

The Fifth Circuit has played a central role in the intensifying constitutional attacks on the NLRB. District courts in Texas, one of three states covered by the Fifth Circuit, have granted the only preliminary injunctions to block agency proceedings based on constitutional arguments.

Decisions on the constitutional issues in the companies’ favor could kneecap the NLRB’s ability to enforce the law within the circuit’s boundaries. They would also likely compel the US Supreme Court to consider the issues.

Amazon Needed Same-Day Ruling

Amazon sued the NLRB in September, asking the US District Court for the Western District of Texas to stop administrative litigation related to a labor dispute with a union in New York.

The e-commerce giant then appealed to the Fifth Circuit after the district court judge failed to meet the company’s Sept. 27 deadline, claiming that failure constituted an effective denial of its plea for an injunction.

But Fifth Circuit Judge James Graves Jr., an Obama appointee, questioned that deadline during oral arguments, because the district court judge asked for supplemental briefing by that same day.

“So you wanted him to receive the briefing on the 27th, read it, review it, and rule all on the same day? And that seemed reasonable to you?” Graves asked Amazon’s attorney, Trevor Cox with Hunton Andrews Kurth LLP “If the 27th was your hard deadline, you’re expecting that’s he’s going to receive the brief and he’s going to rule on the same day and if not, that’s an effective denial. That just doesn’t seem reasonable to me.”

Cox in response said that the judge had “plenty of time” to consider the company’s arguments.

“It was clear that we consider this emergency relief that needed to be granted,” he said. “The fact that we didn’t tell the court in another way, doesn’t mean that the judge was not aware of our need for a decision by the 27th.”

SpaceX Delayed, Then Moved Early

SpaceX sued the NLRB in January in the US District Court for the Southern District of Texas, but didn’t set its May 2 deadline for a ruling on its preliminary injunction request until April 26.

The delayed rush for the preliminary injunction ruling came in the midst of SpaceX’s multi-month fight to keep the case from being transferred to California. The aerospace firm finally won that fight via Fifth Circuit intervention in August.

SpaceX set the May 2 deadline because that was when an administrative law judge was scheduled to hold a hearing on discovery in the unfair labor practice case.

The company challenged the district court’s effective denial of its bid for a preliminary injunction in a April 30 filing with the Fifth Circuit, before its self-imposed deadline passed. The Fifth Circuit agreed to stop the NLRB case in a May 2 order.

SpaceX filed early to account for the time necessary to docket the appeal and for the Fifth Circuit’s motions panel to rule, said the company’s lawyer, Michael Kenneally of Morgan, Lewis & Bockius LLP.

But the panel—which also included Judges Priscilla Richman, a George W. Bush appointee, and Irma Carillo Ramirez, a Biden appointee—suggested a ruling was delayed because of the company’s venue litigation, and that it could have waited to appeal until after the ALJ issued a discovery order.

Kenneally said the NLRB is relying on procedural objections to the appeal because Fifth Circuit precedent makes it clear that the agency’s ALJs have unconstitutional removal protections.

“But you’re saying they’re relying on this procedural question because you win on the merits,” Graves said in response. “That sound to me about like the argument that, ‘Well, procedure doesn’t matter if I win on the merits, so just skip right over procedure.’”

The NLRB was represented by agency attorneys. The International Brotherhood of Teamsters, which intervened in the Amazon case, was represented by Julie Gutman Dickinson with Bush Gottlieb ALC.

The cases are Amazon.com v. NLRB, 5th Cir., No. 24-50761, oral arguments held 11/18/24 and Space Exploration Technologies Corp. v. NLRB, 5th Cir., No. 24-40315, oral arguments held 11/18/24.