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FREE ENTERPRISE FUND v. PUBLIC CO. OVERSIGHT BD.

Docket No.: 08-861
Certiorari Granted: May 18 2009
Argued: December 7, 2012
Decided: June 28, 2010

Topics:

Appointments Clause, Article I, Consumer Protection, Environmental Protection Agency, Executive Power, Fifth Amendment, Medicaid, Medicare, Mergers, Necessary and Proper, Presentment Clause, Twenty-Fifth Amendment, equitable relief, judicial review, preliminary injunction, separation of powers, willful violation

PartyNames: Free Enterprise Fund and Beckstead and Watts, LLP v. Public Company Accounting Oversight Board, et al.
Petitioner: Free Enterprise Fund and Beckstead and Watts, LLP
Respondent: Public Company Accounting Oversight Board, et al.

Court Below: United States Court of Appeals for the District of Columbia Circuit
Citation: 537 F.3d 667

Free Enterprise Fund and Beckstead and Watts, LLP
v.
Public Company Accounting Oversight Board, et al.
Question Presented:

1. Whether the Sarbanes-Oxley Act of 2002 violates the Constitution's separation of powers by vesting members of the Public Company Accounting Oversight Board ("PCAOB") with far-reaching executive power while completely stripping the President of all authority to appoint or remove those members or otherwise supervise or control their exercise of that power, or whether, as the court of appeals held, the Act is constitutional because Congress can restrict the President's removal authority in any way it "deems best for the public interest." 2. Whether the court of appeals erred in holding that, under the Appointments Clause, PCAOB members are "inferior officers" directed and supervised by the Securities and Exchange Commission ("SEC"), where the SEC lacks any authority to supervise those members personally, to remove the members for any policy-related reason or to influence the members' key investigative functions, merely because the SEC may review some of the members' work product. 3. If PCAOB members are inferior officers, whether the Act's provision for their appointment by the SEC violates the Appointments Clause either because the SEC is not a "Department" under Freytag v. Commissioner, 501 U.S. 868 (1991), or because the five commissioners, acting collectively, are not the "Head" of the SEC.

Question:

1) Does the Sarbanes-Oxley Act violate the the separation of powers doctrine by giving broad powers to the Board while simultaneously preventing the President of the power to appoint or remove Board members? 2) Did the court of appeals correctly hold that the Board members were inferior officers under the direct supervision of the SEC even though the SEC cannot supervise those members individually and can only remove them for just cause? 3) Does the Sarbanes-Oxley Act violate the Appointments Clause even if the Board’s members are inferior because the SEC is not an official department or because the commissioners are not the head of the SEC?

FREE ENTERPRISE FUND v. PUBLIC CO. OVERSIGHT BD.
ORAL ARGUMENT

December 7,

Listen to Oral Argument in FREE ENTERPRISE FUND v. PUBLIC CO. OVERSIGHT BD.
Holding: affirmed in part, reversed in part, and
Vote: 5-4
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