“Here-and-Now” Harm and Dual-Layer Removal:
The Fifth Circuit Re-Shapes Pre-Enforcement Review in Energy Transfer, L.P. v. NLRB

Introduction

Energy Transfer, L.P. v. National Labor Relations Board is a consolidated Fifth Circuit decision that binds three district-court cases filed by SpaceX, Energy Transfer (through subsidiary La Grange Acquisition), and Findhelp (Aunt Bertha). All three employers faced unfair-labor-practice (ULP) complaints before the National Labor Relations Board (NLRB). Before those administrative hearings commenced, each employer sued in federal district court, contending that the NLRB’s structure violates Article II because both its five-member Board and its Administrative Law Judges (ALJs) are protected by two layers of for-cause removal. The district courts granted preliminary injunctions halting the agency proceedings.

On appeal the NLRB asserted (i) the district courts lacked jurisdiction under the Norris-La Guardia Act and under “special-statutory-review-scheme” doctrine; and (ii) the employers could not satisfy the traditional injunction factors, especially irreparable harm. The Fifth Circuit—Judge Don R. Willett writing, with Judge Duncan concurring and Judge Wiener concurring in part and dissenting—affirmed the injunctions. The court’s opinion crystallises three significant principles:

1. District courts keep §1331 jurisdiction to enjoin ongoing NLRB proceedings when the constitutional attack is structural and collateral to the NLRA scheme.
2. ALJs insulated by dual “for-cause” layers, and likely the Board Members themselves, offend Article II’s Take-Care Clause; the defect is not cured by potential severance.
3. Being compelled to undergo an unconstitutional adjudication is itself an irreparable, “here-and-now” injury justifying preliminary relief.

Summary of the Judgment

The panel affirmed all three preliminary injunctions. Key holdings:

• Jurisdiction: Neither the Norris-La Guardia Act nor the NLRA’s appellate-review provisions strip district courts of power to hear collateral Article II challenges. The Thunder Basin/ Axon factors—meaningful review, wholly-collateral claim, and agency expertise—each favors district-court jurisdiction.
• Likelihood of Success:
  • Following the Fifth Circuit’s own Jarkesy (SEC) decision, dual layers of protection for ALJs (MSPB “good-cause” plus MSPB member “for-cause” protections) are unconstitutional.
  • Board Members’ “neglect-of-duty or malfeasance” tenure clause likely fails because the NLRB differs meaningfully from the FTC model in Humphrey’s Executor.
• Irreparable Harm: Echoing the Supreme Court’s 2023 decision in Axon Enter., forced participation before an illegitimate tribunal creates a present injury that cannot be remedied afterwards.
• Balance of Equities & Public Interest: The public has no interest in permitting unconstitutional proceedings; stopping unlawful agency action causes the government no legitimate harm.

Analysis

A. Precedents Cited and Their Influence

• Humphrey’s Executor v. United States, 295 U.S. 602 (1935) – Classic approval of limited for-cause tenure for FTC commissioners; Fifth Circuit finds NLRB not a “mirror image” of the 1935 FTC.
• Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010) – Struck down dual-layer removal for audit-board members; foundational for dual-layer analysis.
• Seila Law LLC v. CFPB, 591 U.S. 197 (2020) – Limited Humphrey’s exception to formally balanced multi-member boards; supports skepticism of broad tenure shields.
• Collins v. Yellen, 594 U.S. 220 (2021) – Clarified remedial framework for unconstitutional removal; dissent uses Collins to argue “causal harm” is still required.
• Axon Enterprise, Inc. v. FTC, 598 U.S. 175 (2023) – Held Thunder Basin factors allow district-court challenges; coined “here-and-now” injury language.
• Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022) & 603 U.S. 109 (2024) – Fifth Circuit declared SEC ALJs’ dual removal unconstitutional; Supreme Court affirmed on Seventh Amendment ground but left removal holding in place; Jarkesy is controlling circuit precedent.
• Consumers’ Research v. CPSC, 91 F.4th 342 (5th Cir. 2024) – Upheld CPSC structure; provides “mirror-image FTC” test that court now uses to distinguish NLRB.

B. Court’s Legal Reasoning

1. Jurisdictional Step – Thunder Basin/Axon Framework
   • Meaningful Judicial Review: If final agency review were required, constitutional injury would be complete and unfixable.
   • Wholly Collateral: Plaintiffs do not contest ULP merits but agency’s authority to proceed at all.
   • Agency Expertise: Removal-power and separation-of-powers questions sit well outside NLRB labor-law expertise.
2. Merits Step – Article II Violation
   • ALJs: Two layers (MSPB + Board) mirror SEC structure condemned in Jarkesy.
   • Board Members: Even one-layer for-cause tenure likely invalid because (i) Board wields quintessential executive power (injunctive suits, enforcement, appointment authority); (ii) lacks bipartisan design; (iii) structure politicised in practice.
3. Remedy Step – Preliminary Injunction Factors
   • Irreparable Harm: “Here-and-now” harm from being haled before unconstitutional tribunal; Collins’ causal-link standard applies to backward-looking remedies, not pre-enforcement injunctions.
   • Balance/Public Interest: The government “suffers no cognisable injury” when stopped from enforcing unconstitutional statutes.
   • Severability: Whether tenure clauses can be lopped off is a merits-phase question; not a barrier at preliminary stage.

C. Impact on Future Litigation and Administrative Law

• National Reach for Structural Challenges – Employers (and unions) anywhere in the Fifth Circuit can now pursue district-court injunctions before ALJ hearings begin, citing dual-layer removal.
• Ripple Beyond NLRB – Any agency using §7521 ALJs (e.g., Social Security, FDIC) may face identical challenges; the Jarkesy/ Energy Transfer duo provides ammunition.
• “Here-and-Now” Doctrine Solidified – The opinion extends Axon beyond jurisdiction into the irreparable-harm prong, sharpening a circuit split (10th, 6th, 2nd v. 5th). Supreme Court review is foreseeable.
• Humphrey’s Executor Narrowing – By scrutinising lack of party-parity and expanded prosecutorial power, the decision signals that many “independent” multi-member boards (FCC, FERC, etc.) could face fresh removal challenges.
• Litigation Strategy – Respondents in agency enforcement will almost certainly plead dual-layer removal as an affirmative defence and seek early injunctive relief to pause proceedings.
• Congressional Response – To salvage the NLRB’s adjudicatory machinery, Congress may be pressed to amend §153 and §7521 removal clauses, or redesign enforcement to rely on Article III courts.

Complex Concepts Simplified

• For-Cause Removal – A statutory rule that the President (or agency head) can fire an official only for specified misconduct (“neglect of duty,” “malfeasance”). It blunts the President’s ordinary at-will removal power.
• Dual-Layer Removal – Scenario where Official A can be removed only for cause by Official B, who himself can be removed only for cause by the President. That “double insulation” reduces presidential control two steps away.
• Inferior vs. Principal Officer – Principal officers (cabinet members, board chairs) are appointed by the President with Senate consent and generally removable at will. Inferior officers (ALJs) can be appointed by a department head; still they cannot be excessively insulated.
• Thunder Basin Factors – A tripartite test (meaningful review, wholly-collateral, beyond agency expertise) that determines when litigants may sue in district court rather than await agency review.
• “Here-and-Now” Harm – Injury that happens the moment a party is subjected to an unconstitutional process; unlike monetary loss, it cannot be repaired after the fact.
• Severability – Judicial surgery that cuts unconstitutional parts out of a statute while leaving the rest. Courts prefer severing after a final merits determination, not during preliminary-injunction stage.

Conclusion

Energy Transfer, L.P. v. NLRB powerfully reinforces two constitutional axioms: the President must retain meaningful control over those wielding executive power, and Article III courts stand ready to halt agency processes that violate that mandate. By affirming pre-enforcement injunctions, the Fifth Circuit places real teeth in the “here-and-now” harm concept, simultaneously narrowing Humphrey’s Executor and expanding the reach of Axon. The opinion invites both legislative correction of removal provisions and higher-court clarification over irreparable-harm standards, but its immediate effect is unmistakable: parties need not undergo, and district courts need not tolerate, administrative adjudications conducted by officers doubly shielded from presidential supervision.