The Sarbanes-Oxley Accounting Board: Not Long For This World?
The constitutionality of the Public Company Accounting Oversight Board, enacted as part of the Sarbanes-Oxley Act, was recently upheld — decision available here (PDF) — by a divided panel of the D.C. Circuit. But those who challenged the Board’s legitimacy are fighting on.
The appellants will either seek rehearing en banc in the D.C. Circuit or certiorari from the Supreme Court. In their efforts, expect them to draw support from the forceful dissent by judicial superstar Brett Kavanaugh (who is, by the way, familiar with this fine website).
If appellants seek succor from the SCOTUS, their pleas may fall upon sympathetic ears. From our colleague, former Skadden and Latham corporate lawyer John Carney, over at Dealbreaker:
Perhaps the most ominous sign for the PCAOB is the fact that Judge Kavanaugh clerked for Supreme Court Justice Anthony Kennedy, who would probably hold the swing vote if the case went to the Supreme Court. His dissenting opinion seems tailor-made to provoke the conservative wing of the court into striking down the board. Unless Congress acts to amend it, we’d bet the autonomous PCAOB is headed for extinction.
You can read the rest of his analysis — which will take you “back to Con Law and the halcyon days of youth,” in the words of one Dealbreaker commenter — over here.
Short Sarbanes-Oxley’s Accounting Board [Dealbreaker]
Free Enterprise Fund v. PBAOB (PDF) [U.S. Court of Appeals for the D.C. Circuit]
Sell Sarbanes-Oxley [New York Sun]
D.C. Circuit Affirms Constitutionality of Accounting Oversight Board [WSJ Law Blog]
Will a Lawsuit Unravel SOX? Firm Brings Constitutional Challenge [WSJ Law Blog]
(17) Comments
Comments
hey man im first!!!!!!!!!!!!!!!!1 so unbelievably awesome!!!!!!!!!!!!!!
I MADE IT THUGZ!!!!!!!!!!!!!!!!
and we care about this why?
judicial superstar?!?!? how badly does lat want to suck kavanaugh's dick? just fantasizing about it must keep lat up at night. kavanaugh would never have been appointed to the DC Circuit but for the ridiculous "legal" policies of the current administration. he's hardly a superstar, unless one considers extremist right wing politics alone sufficient to qualify a judge for superstar status.
I'm no Republican, but Kavanaugh's credentials are impeccable. Even the ABA gave him their highest rating:
http://www.whitehouse.gov/infocus/judicialnominees/kavanaugh.html
SOX = bane of existence for corporate executives and $$$ for BIGLAW.
5 = brilliant economist. Truly an interesting study of the regulatory state and its relation to large corporate law firms.
3, are the police in Denver treating you OK?
Hi 6,
You've got to be the biggest douchebag commenting out here. Please GET BACK TO WORK.
Ethics Question:
Does anybody think it would be unethical to do a screening interview with out -of-town firm B while in town for a call back with out-of-town firm A, and thus in town on firm A's dime?
9, That you are in any respect troubled by this clearly indicates your lack of fitness to practice law.
Look out for #1, Gangsta.
Alas, Judge Kava is not CURRENTLY clerking for Supreme Court Justice Anthony Kennedy, and therein lies the difference.
Guys in my high school came up with sarbox while slaying box, it was no big deal.
Kavanaugh a superstar? Are you kidding? He may have credentials, but he is a ridiculous partisan. Dissenting from this case and many others where the law is fairly clear (such as in the EPA CA emissions case where he parted company with the oh-so-not-liberal CJ Sentelle). He will choose whatever the most conservative and administration-supporting outcome is and find a way to get there. Superstar is not the right word here, Lat.
Judicial. Restraint. My. Ass.
Seriously, I want all you conservatives out there who get exorcised about the judiciary's role in gay marriage and abortion to defend this.
13 & 14 generally: morons. judicial restraint is synonymous with upholding the act of another branch despite its violation of fundamental constitutional principles? idiots. unlike members of the judiciary you undoubtedly revere, kavanaugh didn't create a nonexistent basis or redefine a provision to generate the means to justify his end.
as to 13 in particular, "administration-supporting"? this opinion is anything but - no POTUS, bush included, wants this overturned so that the responsibility rightly lies with him/his admin.
incompetents; you should both be fired (if you haven't been already).
15 -- 14 here. I'm not looking to get into a flame war with you. Suffice to say, Congress' interpretation of the appointments clause is reasonable and consistent with its near-universal understanding (from all three branches) for the past 70 years. Now, Judge Kavanaugh and others (mainly, the constitution-in-exile crowd) want to revisit this issue in the service of their theories about how the government SHOULD operate. First, this approach is profoundly undemocratic. Congress and the president, elected by the people, have made a determination. It should be upheld unless it is unreasonable / patently adverse to the constitution. If the constitution-in-exile crowd wants to enact their views, they should run for Congress (indeed, I'd probably be sympathetic to many of their claims on a policy basis). Second, this entire project strikes me as highly un-conservative (in the small c, Burkean sense). They seek to upset our framework of government and disrupt widespread expectations, displaying little respect for the fact that, perhaps, our system has evolved in a certain way because it was the wisest path.
And don't give me the "violation of fundamental constitutional principles" boilerplate. Even Justice Scalia recognizes that you cannot impose an originalist framework on the administrative / regulatory state (e.g., the non-enforcement of the nondelegation doctrine in American Trucking). So if you're going to try and do so half-assed -- because you'd be impeached if you tried to go whole-hog and struck down Social Security, NLRA, SEC, etc. -- I'd like to hear a persuasive logical argument for why this particular decision makes sense within the framework of the world as it is. Failing that, what is left is a raw exercise of judicial power to obtain a preferred policy end. Precisely the same thing that Fed Soc and others used to bemoan.
I have that book, Sarbanes-Oxley For Dummies! It's great. Highly recommended.