By David Ingram

WASHINGTON (Reuters) - Businesses and Senate Republicans forced a courtroom showdown with President Barack Obama's administration on Wednesday, asking a U.S. appeals court to invalidate his surprise appointments to a labor board 11 months ago.

Lawyers with the groups and for Obama's Justice Department argued for more than an hour over whether the president exceeded his authority by filling the vacancies while the Senate was out of town but potentially available to act on them.

The case is a test of the president's ability to make appointments during a Senate recess, a power that bypasses the Senate's usual ability to block nominees and that dates to the U.S. Constitution of 1787. Unlike nominees confirmed by the Senate, recess appointments are only for up to two years.

Obama on January 4 appointed three members of the National Labor Relations Board and named Richard Cordray to run the new Consumer Financial Protection Bureau.

At the time, the Senate was not officially in recess, meeting every few days for minutes at a time but accomplishing no work and with few senators present. Meanwhile, Obama's nominees remained on the Senate's calendar, blocked by Republicans from up or down votes on their confirmation.

The ruling could have implications for Cordray's appointment, although his appointment is not part of the case. It arrived at the U.S. Court of Appeals for the District of Columbia Circuit as a routine dispute between soda bottling company Noel Canning and the labor board. Republican lawyers saw it as a chance to challenge the appointments.

The three-judge panel asked skeptical questions of all sides, leaving no clear indication which way it would rule when it decides the case in coming months. The judges all were appointed by Republican presidents.

The court could decide it must avoid the issue, leaving it up "to the thrusts and parries of the political branches," said Judge Thomas Griffith.

Mitch McConnell, the Senate Republican leader, and Kathryn Ruemmler, Obama's top White House lawyer, attended the high-stakes arguments on opposite sides of the packed courtroom.

DEFINING RECESS

Several other federal appeals courts, including those based in Chicago and Richmond, are hearing similar cases, suggesting the U.S. Supreme Court might be asked to intervene. None of the appeals courts has ruled yet.

Unlike nominees who win Senate confirmation, recess appointments are temporary, for up to two years.

Once rare, recess appointments became more common in the late 1970s as a way to bypass the confirmation process, which senators have used increasingly to block nominees of both Republican and Democratic presidents.

Recent presidents pushed the boundaries. George W. Bush took the rare step of filling a judgeship during a recess, while Obama appointed the NLRB members while the Senate was holding "skeleton" sessions set up to keep it from going into recess.

The Justice Department argues those sessions were a legal fiction that the appeals court should peel away.

Griffith, a former Senate legal counsel, said the Senate's inactivity during January 2012 suggested "they weren't doing anything.

From January 3 to January 23, the Senate passed no legislation, took no votes, accepted no official messages from the president and held no debates. Junior senators gaveled the Senate to order for a few minutes about every three days.

"But they were capable of doing something," replied the company's lawyer, Noel Francisco. "If you flip on C-SPAN on any given day, you will see a Senate that is not particularly busy."

Francisco said it was not the president's job to determine when the Senate, an independent body, is in recess.

NOT GUYS IN A BAR

Justice Department lawyer Beth Brinkmann said there would be a power "vacuum" in Washington if the president were not allowed to make appointments during extended periods when the Senate is not working.

"No one's there. It's empty," she told the court.

Some legal scholars define a Senate recess narrowly as a period that happens once a year, a definition that, if adopted, would invalidate appointments going back decades. Though the judges raised that possibility, no side in the case asked for such a ruling.

Complicating the case is the Senate's practice of not intervening in court cases without unanimous agreement to do so - leaving it without a clear legal position. The group of Senate Republicans were allowed to participate, but did not represent the full Senate.

"The Senate isn't here to tell us what their view is," Griffith said. "So what is there for us to defer to?"

Miguel Estrada, the Senate Republicans' lawyer, said it was enough for the Senate to have passed a resolution in December agreeing to remain in session.

"The Senate was gaveled into session as the Senate, not as a few guys in a bar," said Estrada, whose own nomination to the appeals court was blocked by Democrats.

The case is Noel Canning v. NLRB, U.S. Court of Appeals for the D.C. Circuit, No. 12-1115.

(Editing by Howard Goller, Vicki Allen and Jackie Frank)