Supreme Court Amici Brief of Law Professors in Support of Petitioners in Free Enterprise Fund V. Public Company Accounting Oversight Board, No. 08-861

Abstract

A group of corporate and securities law professors submitted this brief as amici curiae to the United States Supreme Court in Free Enterprise Fund v. Public Company Accounting Oversight Board. Amici support Congress’s decision in the Sarbanes-Oxley Act to establish a new regulator to oversee the auditors of public companies. But amici express concern that the particular design chosen by Congress accords the PCAOB substantial discretion and autonomy without imposing constitutionally sufficient accountability. Specifically, the brief argues that the PCAOB's structure is unconstitutional because it violates the Appointments Clause and the doctrine of separation of powers. With a focus on statutory analysis, legislative history, and the securities industry’s self-regulatory organization (SRO) model on which the PCAOB was patterned, the brief challenges the D.C. Circuit’s conclusion that the PCAOB is merely 'a heavily controlled component' of the SEC. The brief argues instead that the PCAOB is an independent regulatory entity subject to oversight and enforcement by the SEC, another independent regulatory entity, and that this double-decker independence stretches the Constitution’s text and precedents too far. Amici curiae: Stephen Bainbridge, Robert Bartlett, William Birdthistle, Timothy Canova, Lawrence Cunningham, James Fanto, Theresa Gabaldon, Lyman Johnson, Roberta Karmel, Donna Nagy, Lydie Pierre-Louis, Adam Pritchard, Margaret Sachs, Gordon Smith, Kellye Testy