Archive for the ‘unitary executive’ Category

Obscure Cases and Important Principles: Free Enterprise Fund v. PCAOB

October 27, 2009

I am currently participating in on online debate under the auspices of the Federalist Society regarding a case hardly anyone has heard of that is now before the U.S. Supreme Court. The case is called Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB). It poses the question whether Congress acted permissibly in structuring the PCAOB. Its members are (a) appointed by the Securities and Exchange Commission, not by the President, and (b) removable only by the Securities and Exchange Commission – not by the President – and only for good cause. The Federalist Society has asked its debaters to discuss whether these appointment and removal provisions are unconstitutional.

As my colleague Hal Bruff writes in a forthcoming essay, this is the kind of case only separation of powers cognoscenti typically follow, even though it has the potential – albeit, just slight potential – to revolutionize our separation of powers law. That is because, if the Court overturns the removal provisions, it may well cast into doubt the great many statutes that create administrative agencies throughout the federal government, such as the Federal Trade Commission and the Federal Communications Commission. It could instead vindicate so-called Unitary Executive Theory, which I try to refute in Madison’s Nightmare.

I have reprinted below my opening entry in the debate. Anyone intrigued can follow the unfolding conversation here. The other invited participants are Martin Flaherty, Andrew G. McBride, Gillian E. Metzger, Donna M. Nagy, Tuan Samahon, Christian G. Vergonis, and Christian J. Ward. * * *

Appointments: There’s no real doubt that members of the PCAOB are “officers of the United States.” That is, they have duties regarding the implementation of public law that go beyond the tasks Congress could assign to one of its own committees. Hence, its members must be appointed pursuant to the Appointments Clause. And, under the Appointments Clause, they must be appointed by the President with the advice and consent of the Senate, unless they are “inferior officers,” in which case they may be appointed by the president alone, by the head of a department, or by a court of law.

This is the PCAOB’s greatest vulnerability. The members of the PCAOB may well not be “inferior” in the constitutional sense. Although members are removable for good cause by the SEC, their jurisdiction is far more wide-ranging than that of the independent counsel upheld in Morrison v. Olson. The Court could leave Morrison and its antecedents intact, and enjoin the enforcement operations of the PCAOB on noninferiority grounds.

This is doctrinally the most modest way to overturn the PCAOB, and I predict this will be the result, with hardly any greater implications for separation of powers law. If PCAOB members are deemed “inferior,” then I do not see any other vulnerability on the appointments side. As the Court observed in Morrison, Congress’s discretion in choosing among the designated modes of appointing inferior officers is not limited by the text. There would not be anything constitutionally anomalous in giving the SEC power to appoint people with expertise in corporate accounting.

Removal: The more controversial question involves the limitation on direct removals by the President. It is not controversial under Morrison v. Olson. Morrison said that limitations on presidential removal powers are permissible unless they interfere with the President’s capacity to discharge his constitutionally assigned functions. The President, of course, is constitutionally obligated to take care that the laws be faithfully executed. If a PCAOB member is derelict in this regard, the President must be able to instigate that member’s discharge. Under Sarbanes-Oxley, he cannot do so directly – which was also true in Morrison v. Olson – but the failure of the SEC to correct any such dereliction would presumably be good cause for the dismissal of any recalcitrant SEC Commissioner. Under Morrison, this holds up.

The rub, of course, is that there may well be five members of the Court who would now like to overrule Morrison – Roberts, Alito, Scalia, and Thomas, almost certainly, and quite possibly, Kennedy, who recused himself in Morrison. Reaching out to limit or reverse Morrison, however, would be a conspicuous piece of judicial immodesty, especially since the PCAOB can be invalidated on the less controversial ground of noninferiority. I thus predict the Court will not attack Morrison – but this may be wishful thinking on my part because (a) I agree with Morrison and (b) modesty on the Roberts Court is, at best, an occasional virtue.

Obama on Transparency and Scientific Integrity: Some Positive Signs with Some Mixed Signals

March 13, 2009

One kind of issue about presidential control over executive government with proven implications for “science-bending” concerns presidential control over executive branch communications with Congress. Transparency, and all the contributions to “honest brokering” and effective democracy through the “marketplace of ideas” that go with it, is impaired if the President takes the position that communications with Congress or the public must be pre-cleared politically. One notorious example during the Bush administration was the suppression of projections concerning the cost of certain health-care measures. Some such controls are of long-standing, however. Thirty-two years ago, when the author was General Counsel of the US Nuclear Regulatory Commission, the Office of Management and Budget was “coordinating” (i.e., pre-clearing) communications and testimony to Congress about legislative proposals and budgetary matters. The Commission’s nominal independence (it was of course an element of the executive branch, but its statutes provided explicitly for direct communication) softened these controls; but within the Commission itself, its Bureau “executives” sometimes exercised rather rigorous control over what they would permit their staff members to tell the Commission about perceived nuclear power risks – a rather unfortunate situation. (more…)


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