Academic

Strauss on Free Enterprise Fund v. Public Company Accounting Oversight Board

By Lawrence Solum

Peter L. Strauss (Columbia Law School) has posted On the Difficulties of Generalization ? PCAOB in the Footsteps of Myers, Humphrey?s Executor, Morrison and Freytag on SSRN. Here is the abstract:

The Supreme Court?s decision last June in Free Enterprise Fund v. Public Company Accounting Oversight Board is torn between general principle and particularity in considering important questions of separation of powers in American constitutional law ? just as had been an earlier decision that, in some respects, it both repudiated and modeled, Freytag v. Commissioner. Indeed, the same problems live in two earlier cases that are staples of the administrative law and separation of powers repertoire, Myers v. United States and Humphrey?s Executor v. United States. The Supreme Court has a long history of reaching sensible results in its assessments of congressional choices about the structures of government, while having the deuce of a time explaining them. It has taken later developments to pick up the pieces. Its Free Enterprise Fund decision is only the most recent exhibit in this right-minded but inelegantly reasoned chain of opinions.

The essay reviews the tensions between holding and explanation in the earlier cases, and then turns to the PCAOB decision. On the general question what the Constitution provides about the relationship between President and the Departments of executive government, in some respects matters are more settled than they had been at the beginning of the year. All nine Justices placed the independent regulatory commissions where they should be ? not a ?headless fourth branch,? but elements of the executive branch in a different ? but necessary ? oversight relationship with the President. The Supreme Court?s most important function, as Charles Black once remarked, lies in its validation of Congress?s choices, not the opposite. But the majority opinion strangely refuses to say, flat out, that its conclusion entailed a presidential right to demand ?Opinions in writing? from the SEC ? the one authority Article II of the Constitution explicitly gives the President over the acts of domestic agencies ? even as its holding reasons from the necessity of effective presidential oversight of executive action. And it seems unwilling to choose between saying that Congress may not place a for-cause-protected institution within another for-cause-protected institution, an untroubling proposition, and saying that Congress may not give for-cause protection to any ?inferior officer? serving in a for-cause-protected institution, an unsettling proposition. Can Congress not protect the Inspector General of the SEC in the same way as it protects the Inspector General of the Department of Justice? The Court?s approach to such issues would be greatly improved by pragmatic attention to reality and detail.

Full post as published by Legal Theory Blog on October 19, 2010 (boomark / email).