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DC Circuit argument over constitutionality of Public Company Accounting Oversight Board

Yesterday, the DC Circuit heard arguments appealing the dismissal of a challenge to the constitutionality of the Public Company Accounting Oversight Board (Feb. 2006), an institution whose members are appointed by the SEC, which would seem to violate the Appointments Clause. (The lawsuit also alleges nondelegation doctrine problems.) A panel of Judges Brett Kavanaugh, Judith Rogers, and Janice Rogers Brown expressed substantial skepticism to the PCAOB's position, as Michael Carvin argued that the board was a permanent government-like agency with extraordinarily broad and unchecked prosecutorial powers, but outside the power of the president to appoint or remove officials. (Judith Burns, "Accounting Oversight Board Case Heard By Appellate Court", Dow Jones Newswires, Apr. 15; Jurist summary; CEI press release). Because of a nonseverability provision in Sarbanes-Oxley, a finding that PCAOB is unconstitutional would strike down the law entirely, but the argument was not reported on by any newspaper—not even the Wall Street Journal.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.